Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Jun. 01, 2015 | |
Document And Entity Information Abstract | ||
Entity Registrant Name | Enviva Partners, LP | |
Entity Central Index Key | 1592057 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 11,905,138 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Balance_Sheets
Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Partners' capital. | ||
Limited partners' capital | $1,000 | $1,000 |
Receivable from partner | ($1,000) | ($1,000) |
Description_of_Business_and_Ba
Description of Business and Basis of Presentation | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Description of Business and Basis of Presentation | ||||
Description of Business and Basis of Presentation | ||||
(1)Description of Business and Basis of Presentation | ||||
The accompanying unaudited balance sheets of Enviva Partners, LP (the “Partnership”) have been prepared in connection with the completed initial public offering (the “IPO”) of common units representing limited partner interests in the Partnership (see Note 2, Initial Public Offering). The Partnership is a Delaware limited partnership formed on November 12, 2013 as a wholly-owned subsidiary of Enviva Holdings, LP (the “sponsor”). Prior to the closing of the IPO on May 4, 2015, the sponsor contributed to the Partnership its interests in Enviva, LP (the “Predecessor”), Enviva GP, LLC, which is the general partner of the Predecessor, and Enviva Cottondale Acquisition II, LLC, which was the owner of Enviva Pellets Cottondale, LLC. The primary assets contributed to the Partnership by the sponsor included five industrial-scale wood pellet production plants and a wholly-owned deep-water terminal and long-term contractual arrangements to sell the wood pellets produced at the plants to third parties. | ||||
In connection with the closing of the Senior Secured Credit Facilities (as defined below) (see Note 3, Senior Secured Credit Facilities), on April 9, 2015, the Partnership, the Predecessor and the sponsor executed a series of transactions that were accounted for as common control transactions and are referred to as the “Reorganization”. | ||||
· | Under a Contribution Agreement, the Predecessor conveyed 100% of the issued and outstanding limited liability company interest in Enviva Pellets Southampton, LLC, which owns a wood pellet production plant in Southampton County, Virginia (the “Southampton plant”), to a joint venture between the sponsor and Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (the “Hancock JV”); | |||
· | Under a separate Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, the Predecessor and the Partnership, the parties executed the following transactions: | |||
· | The Predecessor distributed cash and cash equivalents of $1.7 million and accounts receivable of $2.4 million to the sponsor; | |||
· | The sponsor contributed 100% of its limited liability company interest in Enviva Cottondale Acquisition II, LLC to the Partnership; | |||
· | The sponsor contributed its interest in the Predecessor and Enviva GP, LLC to the Partnership; | |||
· | The Partnership used $82.2 million of the proceeds from borrowings under the Senior Secured Credit Facilities to repay all outstanding indebtedness under the Predecessor’s $120.0 million senior secured credit facilities (the “Prior Senior Secured Credit Facilities”) and related accrued interest (see Note 3, Senior Secured Credit Facilities). | |||
Until April 9, 2015, Enviva MLP Holdco, LLC, a wholly-owned subsidiary of the sponsor, was the owner of the Predecessor. Until April 9, 2015, Enviva Cottondale Acquisition I, LLC, a wholly-owned subsidiary of the sponsor, was the owner of Enviva Cottondale Acquisition II, LLC, the former owner of Enviva Pellets Cottondale, LLC, which owns a wood pellet production plant in Cottondale, Florida (the “Cottondale plant”) and was acquired by the sponsor on January 5, 2015. As a result of the Reorganization, the Partnership became the owner of the Predecessor, Enviva GP, LLC and Enviva Cottondale Acquisition II, LLC. | ||||
On April 9, 2015, the Partnership entered into a Master Biomass Purchase and Sale Agreement pursuant to which the Hancock JV sells to the Partnership, on a fixed-price basis, wood pellets sourced from the production at the Southampton plant. The purchased wood pellets from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts. | ||||
In connection with the closing of the IPO, under a Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, the Predecessor and the Partnership, Enviva Cottondale Acquisition II, LLC merged into the Partnership and the Partnership contributed its interest in Enviva Pellets Cottondale, LLC to the Predecessor. | ||||
The Predecessor was organized as a Delaware limited partnership on March 18, 2010. The Predecessor supplies utility-grade wood pellets to major power generators under long-term, take-or-pay off-take contracts. The Predecessor acquires wood fiber from landowners and other suppliers, dries and processes that fiber into wood pellets at industrial-scale production plants and transports those products to deep-water marine terminals where they are stored and then distributed to customers. Wood pellets are sold principally to Northern European power generators who use them as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Through April 9, 2014, the Predecessor operated five industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. Wood pellets are exported from a wholly-owned deep-water marine terminal in Chesapeake, Virginia and from a third-party deep-water marine terminal in Mobile, Alabama under a long-term contract. | ||||
The sponsor acquired Green Circle Bio Energy, Inc. (“Green Circle”), which owned the Cottondale plant, in January 2015 and contributed it to the Partnership in April 2015. Prior to such contribution, the sponsor converted Green Circle into a Delaware limited liability company and changed the name of the entity to “Enviva Pellets Cottondale, LLC.” Production from the plant is exported from a third-party terminal in Panama, City, Florida, under a long-term contract. | ||||
The unaudited balance sheets were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited balance sheets include all adjustments and accruals that are necessary for a fair presentation of the results of all interim periods presented herein and are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the prospectus of Enviva Partners, LP dated April 28, 2015, as filed with the SEC on April 29, 2015. | ||||
Initial_Public_Offering
Initial Public Offering | 3 Months Ended |
Mar. 31, 2015 | |
Initial Public Offering. | |
Initial Public Offering | |
(2)Initial Public Offering | |
On May 4, 2015, the Partnership completed an initial public offering of 11,500,000 common units representing limited partner interests in the Partnership at a price to the public of $20.00 per unit ($18.80 per common unit, net of the underwriting discount) and constituting approximately 48.3% of the Partnership’s outstanding limited partner interests. The IPO was made pursuant to a registration statement on Form S-1 originally filed on October 27, 2014, as amended (Registration No. 333-199625), that was declared effective by the SEC on April 28, 2015. On April 29, 2015, the underwriters exercised their option to purchase an additional 1,500,000 common units. The net proceeds from the IPO of approximately $215.1 million after deducting the underwriting discount and structuring fee were used to (i) repay intercompany indebtedness related to the acquisition of Green Circle in the amount of approximately $83.0 million and (ii) distribute approximately $86.7 million to the sponsor related to its contribution of assets to the Partnership in connection with the IPO, with the Partnership retaining $45.4 million for general partnership purposes, including offering expenses. | |
The sponsor owns 51.7% of the Partnership’s limited partner interests through 405,138 common units and all of the Partnership’s subordinated units, as well as the incentive distribution rights. | |
Senior_Secured_Credit_Faciliti
Senior Secured Credit Facilities | 3 Months Ended |
Mar. 31, 2015 | |
Senior Secured Credit Facilities | |
Senior Secured Credit Facilities | |
(3)Senior Secured Credit Facilities | |
On April 9, 2015, the Partnership entered into a Credit Agreement (the “Credit Agreement”) providing for $199.5 million aggregate principal amount of senior secured credit facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) $99.5 million aggregate principal amount of Tranche A-1 advances, (ii) $75.0 million aggregate principal amount of Tranche A-2 advances and (iii) up to $25.0 million aggregate principal amount of revolving credit commitments. The Partnership will also be able to request loans under incremental facilities under the Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments to make loans under such incremental facilities. | |
The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. The applicable margin is (i) for Tranche A-1 base rate borrowings, 3.10% through April 2017, 2.95% thereafter through April 2018 and 2.80% thereafter, and for Tranche A-1 Eurodollar rate borrowings, 4.10% through April 2017, 3.95% thereafter through April 2018 and 3.80% thereafter and (ii) 3.25% for Tranche A-2 base rate borrowings and revolving facility base rate borrowings and 4.25% for Tranche A-2 Eurodollar rate borrowings and revolving facility Eurodollar rate borrowings. The applicable margin for revolving facility borrowings will be reduced by 0.50% if the Total Leverage Ratio (as defined below) is less than or equal to 2.00:1.00. During the continuance of an event of default, overdue amounts under the Senior Secured Credit Facilities will bear interest at 2.00% plus the otherwise applicable interest rate. | |
The Partnership borrowed the full amount of the Tranche A-1 and Tranche A-2 facilities at the closing of the Credit Agreement. A portion of the proceeds from borrowings under the Tranche A-1 and Tranche A-2 facilities was used to repay all outstanding indebtedness under the Prior Senior Secured Credit Facilities and related accrued interest. The remaining portion of the proceeds was used to make a distribution to the sponsor. Borrowings under the revolving facility may be used for working capital requirements and general partnership purposes, including the issuance of letters of credit. | |
The Senior Secured Credit Facilities include customary lender and agency fees, including a 1.00% fee that was paid to the lenders at the closing of the Credit Agreement and a commitment fee payable on undrawn revolving facility commitments of 0.50% per annum (subject to a stepdown to 0.375% per annum if the Total Leverage Ratio is less than or equal to 2.00:1.00). Letters of credit issued under the revolving facility are subject to a fee calculated at the applicable margin for revolving facility Eurodollar rate borrowings. | |
Interest is payable quarterly for loans bearing interest at the base rate and at the end of the applicable interest period for loans bearing interest at the Eurodollar rate. The principal amount of the Tranche A-1 facility is payable in quarterly installments of 0.50% through March 2017, 0.75% thereafter through March 2018 and 1.25% thereafter, in each case subject to a quarterly increase of 0.50% during each year if less than 75% of the aggregate projected production capacity of the wood pellet production plants for the two-year period beginning on January 1 of such year is contracted to be sold during such period pursuant to certain qualifying off-take contracts. The principal amount of the Tranche A-2 facility is payable in equal quarterly installments of 0.25%. No amortization is required with respect to the principal amount of the revolving facility. All outstanding amounts under the Senior Secured Credit Facilities will be due and the letter of credit commitments will terminate on the maturity date or upon earlier prepayment or acceleration. | |
The Partnership is required to make mandatory prepayments of the Senior Secured Credit Facilities with the proceeds of certain asset sales and debt incurrences. The Partnership may voluntarily prepay the Senior Secured Credit Facilities in whole or in part at any time without premium or penalty, except that prepayments of any portion of the Tranche A-1 or Tranche A-2 facilities made in connection with a repricing transaction (as well as any repricing of the Senior Secured Credit Facilities) prior to the six-month anniversary of the Credit Agreement closing date will incur a premium of 1.00% of amounts prepaid (or repriced). | |
The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third parties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default exists under the Credit Agreement or if the interest coverage ratio (determined as the ratio of consolidated EBITDA to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time. | |
Pursuant to the Credit Agreement, the Partnership is required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”) of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter. | |
The obligations under the Credit Agreement are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all of the Partnership’s assets. | |
Management_Services_Agreement
Management Services Agreement | 3 Months Ended |
Mar. 31, 2015 | |
Management Services Agreement | |
Management Services Agreement | |
(4)Management Services Agreement | |
On April 9, 2015, the Partnership, Enviva Partners GP, LLC, the general partner of the Partnership, the Predecessor, Enviva GP, LLC and certain subsidiaries of the Predecessor (collectively, the “Service Recipients”) entered into a five-year Management Services Agreement (the “New MSA”) with Enviva Management Company, LLC (the “Provider”), a subsidiary of Enviva Holdings, LP, pursuant to which the Provider provides the Service Recipients with general administrative and management services and other similar services (the “Services”). Under the terms of the New MSA, the Service Recipients are required to reimburse the Provider the amount of all direct or indirect, internal or third-party expenses incurred, including without limitation: (i) the portion of the salary and benefits of the employees engaged in providing the Services reasonably allocable to the Service Recipients; (ii) the charges and expenses of any third party retained to provide any portion of the Services; (iii) office rent and expenses and other overhead costs incurred in connection with, or reasonably allocable to, providing the Services; (iv) amounts related to the payment of taxes related to the business of the Service Recipients; and (v) costs and expenses incurred in connection with the formation, capitalization, business or other activities of the Provider pursuant to the New MSA. | |
Direct or indirect, internal or third-party expenses incurred are either directly identifiable or allocated to the Partnership by the Provider. The general method used to allocate these expenses is established through the annual budgeting process. The Provider estimates the percentage of salary, benefits, third-party costs, office rent and expenses and any other overhead costs associated with the Services to be provided to the Partnership. Each month, the Provider allocates the actual costs accumulated in the financial accounting system based on the estimated budgeted percentage for each type of cost. The Provider charges the Partnership for any directly identifiable costs such as goods or services provided at the Partnership’s request. | |
Description_of_Business_and_Ba1
Description of Business and Basis of Presentation (Details) (USD $) | 0 Months Ended | ||
In Millions, unless otherwise specified | Apr. 09, 2015 | 4-May-15 | Nov. 30, 2012 |
item | |||
Subsequent Event | |||
Number of industrial-scale production wood pellet production plants | 5 | ||
Prior Senior Secured Credit Facilities | Subsequent Event | |||
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest | 82.2 | ||
Enviva Cottondale Acquisition II, LLC | Subsequent Event | |||
Percentage of interest in subsidiaries | 100.00% | ||
Enviva, LP and Subsidiaries | Subsequent Event | |||
Number of industrial-scale production wood pellet production plants | 5 | ||
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | |||
Maximum aggregate borrowing capacity | 120 | ||
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest | 82.2 | ||
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Subsequent Event | |||
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest | 82.2 | ||
Enviva, LP and Subsidiaries | Enviva Pellets Southampton, LLC | Subsequent Event | |||
Percentage of interest in subsidiaries | 100.00% | ||
Enviva, LP and Subsidiaries | Enviva Holdings, LP | Subsequent Event | |||
Cash and cash equivalents distributed to sponsor | 1.7 | ||
Accounts receivable distributed to sponsor | 2.4 | ||
Enviva, LP and Subsidiaries | Enviva Cottondale Acquisition II, LLC | Subsequent Event | |||
Percentage of interest in subsidiaries | 100.00% |
Initial_Public_Offering_Detail
Initial Public Offering (Details) (Subsequent Event, USD $) | 0 Months Ended | |
In Millions, except Share data, unless otherwise specified | 4-May-15 | Apr. 29, 2015 |
Initial Public Offering | ||
Ownership interest by Non-controlling interest (as a percent) | 48.30% | |
Net proceeds from issuance | $215.10 | |
Repayment of intercompany indebtedness | 83 | |
Distributions to partnership sponsor | 86.7 | |
Amount retained for general purposes | $45.40 | |
Common Stock | ||
Initial Public Offering | ||
Number of common units owned by the Sponsor | 405,138 | |
IPO | Common Stock | ||
Initial Public Offering | ||
Shares issued | 11,500,000 | |
Share price (in dollars per share) | $20 | |
Share price, net of underwriting discounts (in dollars per share) | $18.80 | |
Over-Allotment Option | Common Stock | ||
Initial Public Offering | ||
Shares issued | 1,500,000 | |
Enviva Holdings, LP | Common Stock | ||
Initial Public Offering | ||
Ownership interest (as a percent) | 51.70% |
Senior_Secured_Credit_Faciliti1
Senior Secured Credit Facilities (Details) (Senior Secured Credit Facilities, Subsequent Event, USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Apr. 09, 2015 | Apr. 09, 2015 |
Long term debt and capital lease obligations | ||
Aggregate principal amount | $199.50 | $199.50 |
Floor rate for Eurodollar term loan borrowings | 1.00% | 1.00% |
Reduction in floating interest rate for revolving facility borrowings based on leverage ratio (as a percent) | 0.50% | |
Extra interest in an event of default (as a percent) | 2.00% | 2.00% |
Fee paid to lenders at closing of Credit Agreement (as a percent) | 1.00% | 1.00% |
Prepayment premium or penalty amount (as a percent) | 1.00% | |
Step down in Leverage Ratio | 3.75% | 3.75% |
Increase in Leverage Ratio | 0.5 | 0.5 |
Tranche A-1 advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 99.5 | 99.5 |
Increase in quarterly installments of principal payable based on achieving targeted wood pellet production (as a percent) | 0.50% | |
Aggregate wood pellet production capacity for determining additional quarterly principal payments (as a percent) | 75.00% | |
Period for aggregate wood pellet production capacity (in years) | 2 years | |
Tranche A-1 advances | Through March 2017 | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 0.50% | 0.50% |
Tranche A-1 advances | After March 2017 through March 2018 | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 0.75% | 0.75% |
Tranche A-1 advances | After March 2018 through thereafter | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 1.25% | 1.25% |
Tranche A-1 advances | Through April 2017 | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.10% | |
Tranche A-1 advances | Through April 2017 | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 4.10% | |
Tranche A-1 advances | After April 2017 through April 2018 | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 2.95% | |
Tranche A-1 advances | After April 2017 through April 2018 | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.95% | |
Tranche A-1 advances | After April 2018 through thereafter | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 2.80% | |
Tranche A-1 advances | After April 2018 through thereafter | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.80% | |
Tranche A-2 advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 75 | 75 |
Quarterly installments of principal payable (as a percent) | 0.25% | 0.25% |
Revolving credit commitments | ||
Long term debt and capital lease obligations | ||
Commitment fee payable on undrawn commitments (as a percent) | 0.50% | |
Reduction in commitment fee payable on undrawn commitments based on total leverage ratio (as a percent) | 0.38% | 0.38% |
Tranche A-2 and revolving facility borrowings | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.25% | |
Tranche A-2 and revolving facility borrowings | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 4.25% | |
Minimum | ||
Long term debt and capital lease obligations | ||
Period from closing of the credit agreement for prepayment of debt resulting in a premium or penalty payment (in months) | 6 months | |
Interest coverage ratio | 2.25 | 2.25 |
Maximum | ||
Long term debt and capital lease obligations | ||
Leverage Ratio required for reduction in margin rate | 2 | |
Initial Leverage Ratio | 4.25 | 4.25 |
Maximum | Revolving credit commitments | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | $25 | $25 |
Leverage Ratio required for reduction in margin rate | 2 |
Management_Services_Agreement_
Management Services Agreement (Details) (New MSA, Subsequent Event) | 0 Months Ended |
Apr. 09, 2015 | |
New MSA | Subsequent Event | |
Related Party Transaction | |
Term of agreement | 5 years |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Predecessor) (Enviva, LP and Subsidiaries, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Enviva, LP and Subsidiaries | ||
Current assets: | ||
Cash and cash equivalents | $5,646,000 | $592,000 |
Accounts receivable, net of allowance for doubtful accounts of $64 in 2015 and $61 in 2014 | 24,560,000 | 21,998,000 |
Inventories | 18,633,000 | 18,064,000 |
Restricted cash | 7,640,000 | 11,640,000 |
Deferred issuance costs | 4,952,000 | 4,052,000 |
Prepaid expenses and other current assets | 1,470,000 | 1,734,000 |
Total current assets | 62,901,000 | 58,080,000 |
Property, plant and equipment, net of accumulated depreciation of $45.6 million in 2015 and $40.9 million in 2014 | 312,276,000 | 316,259,000 |
Intangible assets, net of accumulated amortization of $1.1 million in 2015 and $1.0 million in 2014 | 695,000 | 722,000 |
Goodwill | 4,879,000 | 4,879,000 |
Debt issuance costs, net of accumulated amortization of $3.4 million in 2015 and $3.0 million in 2014 | 3,247,000 | 3,594,000 |
Other long-term assets | 715,000 | 955,000 |
Total assets | 384,713,000 | 384,489,000 |
Current liabilities: | ||
Accounts payable | 7,257,000 | 4,013,000 |
Related party payable | 5,639,000 | 2,354,000 |
Accrued liabilities | 8,864,000 | 8,159,000 |
Deferred revenue | 79,000 | 60,000 |
Current portion of interest payable | 15,000 | 73,000 |
Current portion of long-term debt and capital lease obligations | 9,514,000 | 10,237,000 |
Total current liabilities | 31,368,000 | 24,896,000 |
Long-term debt and capital lease obligations | 77,960,000 | 83,838,000 |
Interest payable | 616,000 | 572,000 |
Interest rate swap derivatives | 124,000 | 101,000 |
Other long-term liabilities | 548,000 | 554,000 |
Total liabilities | 110,616,000 | 109,961,000 |
Commitments and contingencies | ||
Partners' capital: | ||
Capital attributable to Enviva Holdings, LP | 271,072,000 | 271,495,000 |
Noncontrolling partners' interests | 3,025,000 | 3,033,000 |
Total partners' capital | 274,097,000 | 274,528,000 |
Total liabilities and partners' capital | $384,713,000 | $384,489,000 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Predecessor) (Parenthetical) (Enviva, LP and Subsidiaries, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Enviva, LP and Subsidiaries | ||
Accounts receivable, allowance for doubtful accounts | $64,000 | $61,000 |
Property, plant and equipment, accumulated depreciation | 45,633,000 | 40,858,000 |
Intangible assets, accumulated amortization | 1,100,000 | 1,000,000 |
Debt issuance costs, accumulated amortization | $3,400,000 | $3,000,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Predecessor) (Enviva, LP and Subsidiaries, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Enviva, LP and Subsidiaries | ||
Product sales | $70,983 | $65,818 |
Other revenue | 1,168 | 680 |
Net revenue | 72,151 | 66,498 |
Cost of goods sold, excluding depreciation and amortization | 64,294 | 60,653 |
Depreciation and amortization | 4,658 | 4,846 |
Total cost of goods sold | 68,952 | 65,499 |
Gross margin | 3,199 | 999 |
General and administrative expenses | 3,310 | 2,059 |
Loss from operations | -111 | -1,060 |
Other income (expense): | ||
Interest expense | -1,916 | -2,228 |
Other income (expense) | 3 | -69 |
Total other expense, net | -1,913 | -2,297 |
Net loss | -2,024 | -3,357 |
Less net loss attributable to noncontrolling partners' interests | 8 | 21 |
Net loss attributable to Enviva, LP | ($2,016) | ($3,336) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Changes in Partners' Capital (Predecessor) (Enviva, LP and Subsidiaries, USD $) | Enviva, LP and Subsidiaries | Enviva, LP and Subsidiaries | Enviva, LP and Subsidiaries |
In Thousands, unless otherwise specified | Enviva Holdings LP | Noncontrolling Partners' Interests | USD ($) |
USD ($) | USD ($) | ||
Balance at the beginning of the period at Dec. 31, 2013 | $271,411 | ||
Changes in Partners' Capital | |||
Net income (loss) | -3,357 | ||
Balance at the end of the period at Mar. 31, 2014 | |||
Balance at the beginning of the period at Dec. 31, 2013 | 268,299 | 3,112 | 271,411 |
Changes in Partners' Capital | |||
Contributed capital | 2,930 | 2,930 | |
Share-based compensation expense | 2 | 2 | |
Net income (loss) | 264 | -79 | 185 |
Balance at the end of the period at Dec. 31, 2014 | 271,495 | 3,033 | 274,528 |
Changes in Partners' Capital | |||
Contributed capital | 1,593 | 1,593 | |
Net income (loss) | -2,016 | -8 | -2,024 |
Balance at the end of the period at Mar. 31, 2015 | $271,072 | $3,025 | $274,097 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Predecessor) (Enviva, LP and Subsidiaries, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Enviva, LP and Subsidiaries | ||
Cash flows from operating activities: | ||
Net loss | ($2,024) | ($3,357) |
Adjustment to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 4,669 | 4,854 |
Amortization of debt issuance costs and original issue discount | 505 | 505 |
General and administrative expense incurred by Enviva Holdings, LP | 475 | |
Early retirement of debt obligations | 73 | |
Loss (gain) on disposals of property, plant and equipment | 18 | -8 |
Share-based compensation | 1 | |
Change in fair value of interest rate swap derivatives | 23 | -11 |
Change in operating assets and liabilities: | ||
Accounts receivable | -2,563 | -6,880 |
Prepaid expenses and other assets | 483 | 1,889 |
Inventories | -460 | 3,364 |
Other long-term assets | 240 | 121 |
Accounts payable and accrued liabilities | 7,689 | 1,243 |
Accrued interest | -14 | 45 |
Deferred revenue | 19 | -218 |
Other current liabilities | 25 | |
Other long-term liabilities | 258 | |
Net cash provided by operating activities: | 9,085 | 1,879 |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | -1,272 | -8,278 |
Restricted cash | -49 | |
Proceeds from the sale of equipment | 25 | |
Net cash used in investing activities | -1,272 | -8,302 |
Cash flows from financing activities: | ||
Principal payments on debt and capital lease obligations | -12,759 | -595 |
Cash restricted for debt service | 4,000 | -2,300 |
Proceeds from debt issuance | 6,000 | 15,000 |
Net cash (used in) provided by financing activities | -2,759 | 12,105 |
Net increase in cash and cash equivalents | 5,054 | 5,682 |
Cash and cash equivalents, beginning of period | 592 | 3,558 |
Cash and cash equivalents, end of period | 5,646 | 9,240 |
Non-cash investing and financing activities: | ||
The Company acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired included in accounts payable and accrued liabilities | 351 | 4,301 |
The Company acquired property, plant and equipment in non-cash transactions: Property, plant and equipment acquired under capital leases | 290 | |
Financed insurance | 1,711 | |
Depreciation capitalized to inventories | 109 | 163 |
Early retirement of debt obligation: Deposit applied to principal outstanding under promissory note | 391 | |
Early retirement of debt obligation: Deposit applied to accrued interest under promissory note | 154 | |
Non-cash capital contributions from Enviva Holdings, LP | 1,118 | 543 |
Supplemental information: | ||
Interest paid | $1,401 | $1,688 |
Description_of_Business_and_Ba2
Description of Business and Basis of Presentation (Predecessor) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Description of Business and Basis of Presentation | ||||
(1)Description of Business and Basis of Presentation | ||||
The accompanying unaudited balance sheets of Enviva Partners, LP (the “Partnership”) have been prepared in connection with the completed initial public offering (the “IPO”) of common units representing limited partner interests in the Partnership (see Note 2, Initial Public Offering). The Partnership is a Delaware limited partnership formed on November 12, 2013 as a wholly-owned subsidiary of Enviva Holdings, LP (the “sponsor”). Prior to the closing of the IPO on May 4, 2015, the sponsor contributed to the Partnership its interests in Enviva, LP (the “Predecessor”), Enviva GP, LLC, which is the general partner of the Predecessor, and Enviva Cottondale Acquisition II, LLC, which was the owner of Enviva Pellets Cottondale, LLC. The primary assets contributed to the Partnership by the sponsor included five industrial-scale wood pellet production plants and a wholly-owned deep-water terminal and long-term contractual arrangements to sell the wood pellets produced at the plants to third parties. | ||||
In connection with the closing of the Senior Secured Credit Facilities (as defined below) (see Note 3, Senior Secured Credit Facilities), on April 9, 2015, the Partnership, the Predecessor and the sponsor executed a series of transactions that were accounted for as common control transactions and are referred to as the “Reorganization”. | ||||
· | Under a Contribution Agreement, the Predecessor conveyed 100% of the issued and outstanding limited liability company interest in Enviva Pellets Southampton, LLC, which owns a wood pellet production plant in Southampton County, Virginia (the “Southampton plant”), to a joint venture between the sponsor and Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (the “Hancock JV”); | |||
· | Under a separate Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, the Predecessor and the Partnership, the parties executed the following transactions: | |||
· | The Predecessor distributed cash and cash equivalents of $1.7 million and accounts receivable of $2.4 million to the sponsor; | |||
· | The sponsor contributed 100% of its limited liability company interest in Enviva Cottondale Acquisition II, LLC to the Partnership; | |||
· | The sponsor contributed its interest in the Predecessor and Enviva GP, LLC to the Partnership; | |||
· | The Partnership used $82.2 million of the proceeds from borrowings under the Senior Secured Credit Facilities to repay all outstanding indebtedness under the Predecessor’s $120.0 million senior secured credit facilities (the “Prior Senior Secured Credit Facilities”) and related accrued interest (see Note 3, Senior Secured Credit Facilities). | |||
Until April 9, 2015, Enviva MLP Holdco, LLC, a wholly-owned subsidiary of the sponsor, was the owner of the Predecessor. Until April 9, 2015, Enviva Cottondale Acquisition I, LLC, a wholly-owned subsidiary of the sponsor, was the owner of Enviva Cottondale Acquisition II, LLC, the former owner of Enviva Pellets Cottondale, LLC, which owns a wood pellet production plant in Cottondale, Florida (the “Cottondale plant”) and was acquired by the sponsor on January 5, 2015. As a result of the Reorganization, the Partnership became the owner of the Predecessor, Enviva GP, LLC and Enviva Cottondale Acquisition II, LLC. | ||||
On April 9, 2015, the Partnership entered into a Master Biomass Purchase and Sale Agreement pursuant to which the Hancock JV sells to the Partnership, on a fixed-price basis, wood pellets sourced from the production at the Southampton plant. The purchased wood pellets from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts. | ||||
In connection with the closing of the IPO, under a Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, the Predecessor and the Partnership, Enviva Cottondale Acquisition II, LLC merged into the Partnership and the Partnership contributed its interest in Enviva Pellets Cottondale, LLC to the Predecessor. | ||||
The Predecessor was organized as a Delaware limited partnership on March 18, 2010. The Predecessor supplies utility-grade wood pellets to major power generators under long-term, take-or-pay off-take contracts. The Predecessor acquires wood fiber from landowners and other suppliers, dries and processes that fiber into wood pellets at industrial-scale production plants and transports those products to deep-water marine terminals where they are stored and then distributed to customers. Wood pellets are sold principally to Northern European power generators who use them as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Through April 9, 2014, the Predecessor operated five industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. Wood pellets are exported from a wholly-owned deep-water marine terminal in Chesapeake, Virginia and from a third-party deep-water marine terminal in Mobile, Alabama under a long-term contract. | ||||
The sponsor acquired Green Circle Bio Energy, Inc. (“Green Circle”), which owned the Cottondale plant, in January 2015 and contributed it to the Partnership in April 2015. Prior to such contribution, the sponsor converted Green Circle into a Delaware limited liability company and changed the name of the entity to “Enviva Pellets Cottondale, LLC.” Production from the plant is exported from a third-party terminal in Panama, City, Florida, under a long-term contract. | ||||
The unaudited balance sheets were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited balance sheets include all adjustments and accruals that are necessary for a fair presentation of the results of all interim periods presented herein and are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the prospectus of Enviva Partners, LP dated April 28, 2015, as filed with the SEC on April 29, 2015. | ||||
Enviva, LP and Subsidiaries | ||||
Description of Business and Basis of Presentation | ||||
(1)Description of Business and Basis of Presentation | ||||
The accompanying unaudited condensed consolidated financial statements (“interim statements”) of Enviva, LP (the “Company” or the “Predecessor”) have been prepared in connection with the completed initial public offering (the “IPO”) of common units representing limited partner interests in Enviva Partners, LP (the “Partnership”). The Predecessor was organized as a Delaware limited partnership on March 18, 2010. The Predecessor supplies utility-grade wood pellets to major power generators under long-term, take-or-pay off-take contracts. The Predecessor acquires wood fiber from landowners and other suppliers, dries and processes that fiber into wood pellets at industrial-scale production plants and transports those products to deep-water marine terminals where they are stored and then distributed to customers. Wood pellets are sold principally to Northern European power generators who use them as a substitute fuel for coal in dedicated biomass or co-fired coal power plants. Through April 9, 2014, the Predecessor operated five industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. Wood pellets are exported from a wholly-owned deep-water marine terminal in Chesapeake, Virginia and from a third-party deep-water marine terminal in Mobile, Alabama under a long-term contract. | ||||
The Partnership is a Delaware limited partnership formed on November 12, 2013, as a wholly-owned subsidiary of Enviva Holdings, LP (the “sponsor”). The Company represents certain of the assets that the sponsor contributed to the Partnership prior to the closing of the IPO on May 4, 2015, and, therefore, the Company is viewed as the Predecessor of the Partnership. The primary assets contributed included five industrial-scale production wood pellet production plants and a wholly-owned deep-water terminal and long-term contractual arrangements to sell the wood pellets produced at the plants to third parties. | ||||
In connection with the closing of the Senior Secured Credit Facilities (as defined below) (see Note 8, Long-Term Debt and Capital Lease Obligations), on April 9, 2015, the Predecessor, the Partnership and the sponsor executed a series of transactions that were accounted for as common control transactions and are referred to as the “Reorganization”. | ||||
· | Under a Contribution Agreement, the Predecessor conveyed 100% of the issued and outstanding limited liability company interest in Enviva Pellets Southampton, LLC, which owns a wood pellet production plant in Southampton County, Virginia (the “Southampton plant”), to a joint venture between the sponsor and Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (the “Hancock JV”); | |||
· | Under a separate Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, the Predecessor and the Partnership, the parties executed the following transactions: | |||
· | The Predecessor distributed cash and cash equivalents of $1.7 million and accounts receivable of $2.4 million to the sponsor; | |||
· | The sponsor contributed 100% of its limited liability company interest in Enviva Cottondale Acquisition II, LLC to the Partnership under a common control transaction; | |||
· | The sponsor contributed its interest in the Predecessor and Enviva GP, LLC, the general partner of the Predecessor, to the Partnership; | |||
· | The Partnership used $82.2 million of the proceeds from borrowings under the Senior Secured Credit Facilities to repay all outstanding indebtedness under the Predecessor’s Prior Senior Secured Credit Facilities (as defined below) and related accrued interest (see Note 8, Long-Term Debt and Capital Lease Obligations). | |||
Until April 9, 2015, Enviva MLP Holdco, LLC, a wholly-owned subsidiary of the sponsor, was the owner of the Company. Through April 9, 2015, Enviva Cottondale Acquisition I, LLC, a wholly-owned subsidiary of the sponsor, was the owner of Enviva Cottondale Acquisition II, LLC, the former owner of Enviva Pellets Cottondale, LLC, which owns a wood pellet production plant in Cottondale, Florida, and was acquired by the sponsor on January 5, 2015. As a result of the Reorganization, the Partnership became the owner of the Predecessor, Enviva GP, LLC and Enviva Cottondale Acquisition II, LLC. | ||||
On April 9, 2015, the Partnership entered into a Master Biomass Purchase and Sale Agreement pursuant to which the Hancock JV sells to the Partnership, on a fixed-price basis, wood pellets sourced from the production at the Southampton plant. The purchased wood pellets from the Hancock JV are sold to the Partnership’s customers under existing off-take contracts. | ||||
In connection with the closing of the IPO, under a Contribution Agreement by and among the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, the Predecessor and the Partnership, Enviva Cottondale Acquisition II, LLC merged into the Partnership and the Partnership contributed its interest in Enviva Pellets Cottondale, LLC to the Predecessor. | ||||
The accompanying condensed consolidated financial statements include the accounts of the Predecessor and its subsidiaries and were prepared using the Predecessor’s historical basis. Prior to the IPO, certain of the assets and liabilities of the Predecessor were transferred to the Partnership within the sponsor’s consolidated group in a transaction under common control. All significant intercompany accounts and transactions have been eliminated. | ||||
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X issued by the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments and accruals that are necessary for a fair presentation of the results of all interim periods presented herein and are of a normal recurring nature. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the prospectus of Enviva Partners, LP as filed with the SEC on April 29, 2015. | ||||
Significant_Accounting_Policie
Significant Accounting Policies (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Enviva, LP and Subsidiaries | ||||
Significant Accounting Policies | ||||
(2)Significant Accounting Policies | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Company’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||||
Segment and Geographic Information | ||||
Operating segments are defined as components of an enterprise about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment. All long-lived assets of the Company are located in the United States. | ||||
Other Comprehensive Income (Loss) | ||||
Comprehensive loss includes net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of partners’ capital but are excluded from net loss. The Company had no components of other comprehensive income (loss) for the three months ended March 31, 2015 and 2014. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less. | ||||
Restricted Cash | ||||
The Company funded a restricted debt service reserve account in connection with its Prior Senior Secured Credit Facilities (see Note 8, Long-Term Debt and Capital Lease Obligations). The Prior Credit Agreement (as defined below) required the Company to fund a restricted debt service reserve account according to a debt service reserve requirement minimum. As of March 31, 2015 and December 31, 2014, the Company had $7.6 million and $11.6 million, respectively, deposited to the restricted debt service reserve account. | ||||
Revenue Recognition | ||||
The Company primarily earns revenue by supplying wood pellets to customers under long-term, U.S. dollar-denominated contracts (also referred to as “off-take” contracts). The Company refers to the structure of the contracts as “take-or-pay” because they include a firm obligation to take a fixed quantity of product at a stated price and provisions that ensure the Company will be made whole in the case of the customer’s failure to accept all or a part of the contracted volumes or for termination by the customer. Each contract defines the annual volume of wood pellets that the customer is required to purchase and the Company is required to sell, the fixed-price per metric ton for product satisfying a base net calorific value and other technical specifications, and, in some instances, provides for price adjustments for actual product specification and changes in underlying costs. Revenues from the sale of wood pellets are recognized when the goods are shipped, title passes, the sales price to the customer is fixed and collectability is reasonably assured. | ||||
Depending on the specific off-take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Free on Board (“FOB”). Under a CIF contract, the Company procures and pays for shipping costs which include insurance and all other charges up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under a FOB contract, the customer is directly responsible for shipping costs. | ||||
In some cases, the Company may purchase shipments of product from a third-party supplier and resell them in back-to-back transactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from these transactions is recorded net of costs paid to the third-party supplier. The Company records this revenue as “Other revenue.” | ||||
In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, including reimbursement of any incremental costs incurred by the Company, which is included in revenue. | ||||
Cost of Goods Sold | ||||
Cost of goods sold includes the costs to produce and deliver wood pellets to customers. Raw material, production and distribution costs associated with delivering wood pellets to the ports and third-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the facilities. These costs are reflected in costs of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization are expensed as incurred. Inventory is recorded using FIFO which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of costs of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer. | ||||
Additionally, the purchase price of an acquired customer contract that was recorded as an intangible asset is amortized as deliveries are made during the contract term. | ||||
Debt Issuance Costs and Original Issue Discount | ||||
The Predecessor incurred debt issuance costs and original issue discount in connection with the Prior Senior Secured Credit Facilities (see Note 8, Long-Term Debt and Capital Lease Obligations), which included legal fees and other direct expenses. | ||||
Deferred Issuance Costs | ||||
Deferred issuance costs, primarily consisting of legal, accounting, printing and other fees relating to a initial public offering, are capitalized. In the event an offering is terminated, the deferred issuance costs will be expensed. As of March 31, 2015 and December 31, 2014, the Company had capitalized $5.0 million and $4.1 million of deferred issuance costs, respectively. | ||||
Impairment of Long-Lived Assets | ||||
Long-lived assets, such as property, plant and equipment and amortizable intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’s carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | ||||
Fair Value Measurements | ||||
The Company applies authoritative accounting guidance for fair value measurements of financial and nonfinancial assets and liabilities. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: | ||||
· | Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. | |||
· | Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | |||
· | Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. | |||
Recent and Pending Accounting Pronouncements | ||||
In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Interest-Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires the presentation of debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. The amortization of such costs will continue to be reported as interest expense. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and allows early adoption for financial statements that have not been previously issued. The update requires retrospective application upon adoption. The Company is currently evaluating the impact of this accounting standard. | ||||
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard reduces the number of consolidation models and simplifies their application. The amendments in ASU No. 2015-02 are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. The amendments simplify the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) eliminate the presumption that a general partner should consolidate a limited partnership, (2) eliminate the indefinite deferral of FASB Statement No. 167, thereby reducing the number of variable interest entity (“VIE”) consolidation models from four to two (including the limited partnership consolidation model), (3) clarify when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (4) amend the guidance for assessing how related party relationships affect VIE consolidation analysis and (5) exclude certain money market funds from the consolidation guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The standard allows early adoption, including early adoption in an interim period. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. | ||||
In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items. The new standard eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU No. 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. The standard is effective for periods beginning after December 15, 2015 and early adoption is permitted. The adoption of ASU No. 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. | ||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides new guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The new standard also requires significantly expanded disclosure regarding qualitative and quantitative information about the nature, timing and uncertainty of revenue and cash flow arising from contracts with customers. On April 1, 2015, the FASB voted to propose a one-year delay in the effective date of ASU No. 2014-09, and it is expected to become effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is not permitted. The standard permits the use of either applying retrospectively the amendment to each prior reporting period presented or retrospectively with the cumulative effect of initially applying at the date of initial application. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements and has not determined which implementation method will be adopted. The Company’s adoption is not expected to have a material effect on the recognition of revenue. | ||||
Significant_Risks_and_Uncertai
Significant Risks and Uncertainties Including Business and Credit Concentrations (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended |
Mar. 31, 2015 | |
Enviva, LP and Subsidiaries | |
Significant Risks and Uncertainties Including Business and Credit Concentrations | |
(3)Significant Risks and Uncertainties Including Business and Credit Concentrations | |
The Company’s business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the European Union (the “E.U.”). If the E.U. significantly modifies such legislation and regulations, the Company’s ability to enter into new contracts as the current contracts expire may be adversely affected. | |
The Company’s primary industrial customers are located in Northern Europe. Three customers accounted for 100% of the Company’s product sales during the three months ended March 31, 2015 and 97% of the Company’s product sales during the three months ended March 31, 2014. | |
The Company’s cash and cash equivalents are placed in or with various financial institutions. The Company has not experienced any losses on such accounts and does not believe it has any significant risk in this area. | |
Property_Plant_and_Equipment_P
Property, Plant and Equipment (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Enviva, LP and Subsidiaries | ||||||||
Property, Plant and Equipment | ||||||||
(4)Property, Plant and Equipment | ||||||||
Property, plant and equipment consisted of the following at: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Land | $ | 11,984 | $ | 11,984 | ||||
Land improvements | 25,106 | 24,899 | ||||||
Buildings | 57,345 | 57,275 | ||||||
Machinery and equipment | 259,731 | 259,186 | ||||||
Vehicles | 768 | 768 | ||||||
Furniture and office equipment | 1,820 | 1,736 | ||||||
356,754 | 355,848 | |||||||
Less accumulated depreciation | (45,633 | ) | (40,858 | ) | ||||
311,121 | 314,990 | |||||||
Construction in progress | 1,155 | 1,269 | ||||||
Total property, plant and equipment, net | $ | 312,276 | $ | 316,259 | ||||
Total depreciation expense was $4.6 million and $4.8 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
Inventories_Predecessor
Inventories (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Enviva, LP and Subsidiaries | ||||||||
Inventories | ||||||||
(5)Inventories | ||||||||
Inventories consisted of the following at: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Raw materials and work-in-process | $ | 6,100 | $ | 6,880 | ||||
Consumable tooling | 7,479 | 6,934 | ||||||
Finished goods | 5,054 | 4,250 | ||||||
Total inventories | $ | 18,633 | $ | 18,064 | ||||
Derivative_Instruments_Predece
Derivative Instruments (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Enviva, LP and Subsidiaries | ||||||||||||
Derivative Instruments | ||||||||||||
(6)Derivative Instruments | ||||||||||||
The Company uses interest rate swaps that meet the definition of a derivative instrument to manage changes in interest rates on its variable-rate debt instruments. | ||||||||||||
The Company’s Prior Credit Agreement required the Company to swap a minimum of 50% of the term loan balance outstanding under the Prior Senior Secured Credit Facilities. In connection with the issuance of the Prior Senior Secured Credit Facilities (see Note 8, Long-Term Debt and Capital Lease Obligations), the Company entered into floating-to-fixed interest rate swaps (the Company received a floating market rate and paid a fixed interest rate) to manage the interest rate exposure related to the Prior Senior Secured Credit Facilities. | ||||||||||||
The Company recorded insignificant amounts related to the change in the fair value of the interest rate swap agreements for the three months ended March 31, 2015 and 2014 as interest expense. | ||||||||||||
The Company’s interest rate swaps consisted of the following at: | ||||||||||||
Interest Rate Swap | Fixed Rate | Floating Rate | Maturity | 31-Mar-15 | ||||||||
(Notional Value) | Percentage | Percentage | Fair Value | |||||||||
$ | 29,438 | 1.48 | % | 1.25 | % | 24-Dec-15 | $ | (49 | ) | |||
29,438 | 1.493 | % | 1.25 | % | 30-Dec-16 | (75 | ) | |||||
$ | (124 | ) | ||||||||||
Interest Rate Swap | Fixed Rate | Floating Rate | Maturity | 31-Dec-14 | ||||||||
(Notional Value) | Percentage | Percentage | Fair Value | |||||||||
$ | 30,234 | 1.48 | % | 1.25 | % | 24-Dec-15 | $ | (63 | ) | |||
30,234 | 1.493 | % | 1.25 | % | 30-Dec-16 | (38 | ) | |||||
$ | (101 | ) | ||||||||||
Fair_Value_Measurements_Predec
Fair Value Measurements (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended |
Mar. 31, 2015 | |
Enviva, LP and Subsidiaries | |
Fair Value Measurements | |
(7)Fair Value Measurements | |
The amounts reported in the condensed consolidated balance sheets as cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other assets, accounts payable, related party payable and accrued liabilities approximate fair value because of the short-term nature of these instruments. | |
Interest rate swaps and long-term and short-term debt are classified as Level 2 instruments due to the usage of market prices not quoted on active markets and other observable market data. The carrying amount of Level 2 instruments approximates fair value as of March 31, 2015 and December 31, 2014. | |
LongTerm_Debt_and_Capital_Leas
Long-Term Debt and Capital Lease Obligations (Predecessor) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Long-Term Debt and Capital Lease Obligations | ||||||||
(3)Senior Secured Credit Facilities | ||||||||
On April 9, 2015, the Partnership entered into a Credit Agreement (the “Credit Agreement”) providing for $199.5 million aggregate principal amount of senior secured credit facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) $99.5 million aggregate principal amount of Tranche A-1 advances, (ii) $75.0 million aggregate principal amount of Tranche A-2 advances and (iii) up to $25.0 million aggregate principal amount of revolving credit commitments. The Partnership will also be able to request loans under incremental facilities under the Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments to make loans under such incremental facilities. | ||||||||
The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. The applicable margin is (i) for Tranche A-1 base rate borrowings, 3.10% through April 2017, 2.95% thereafter through April 2018 and 2.80% thereafter, and for Tranche A-1 Eurodollar rate borrowings, 4.10% through April 2017, 3.95% thereafter through April 2018 and 3.80% thereafter and (ii) 3.25% for Tranche A-2 base rate borrowings and revolving facility base rate borrowings and 4.25% for Tranche A-2 Eurodollar rate borrowings and revolving facility Eurodollar rate borrowings. The applicable margin for revolving facility borrowings will be reduced by 0.50% if the Total Leverage Ratio (as defined below) is less than or equal to 2.00:1.00. During the continuance of an event of default, overdue amounts under the Senior Secured Credit Facilities will bear interest at 2.00% plus the otherwise applicable interest rate. | ||||||||
The Partnership borrowed the full amount of the Tranche A-1 and Tranche A-2 facilities at the closing of the Credit Agreement. A portion of the proceeds from borrowings under the Tranche A-1 and Tranche A-2 facilities was used to repay all outstanding indebtedness under the Prior Senior Secured Credit Facilities and related accrued interest. The remaining portion of the proceeds was used to make a distribution to the sponsor. Borrowings under the revolving facility may be used for working capital requirements and general partnership purposes, including the issuance of letters of credit. | ||||||||
The Senior Secured Credit Facilities include customary lender and agency fees, including a 1.00% fee that was paid to the lenders at the closing of the Credit Agreement and a commitment fee payable on undrawn revolving facility commitments of 0.50% per annum (subject to a stepdown to 0.375% per annum if the Total Leverage Ratio is less than or equal to 2.00:1.00). Letters of credit issued under the revolving facility are subject to a fee calculated at the applicable margin for revolving facility Eurodollar rate borrowings. | ||||||||
Interest is payable quarterly for loans bearing interest at the base rate and at the end of the applicable interest period for loans bearing interest at the Eurodollar rate. The principal amount of the Tranche A-1 facility is payable in quarterly installments of 0.50% through March 2017, 0.75% thereafter through March 2018 and 1.25% thereafter, in each case subject to a quarterly increase of 0.50% during each year if less than 75% of the aggregate projected production capacity of the wood pellet production plants for the two-year period beginning on January 1 of such year is contracted to be sold during such period pursuant to certain qualifying off-take contracts. The principal amount of the Tranche A-2 facility is payable in equal quarterly installments of 0.25%. No amortization is required with respect to the principal amount of the revolving facility. All outstanding amounts under the Senior Secured Credit Facilities will be due and the letter of credit commitments will terminate on the maturity date or upon earlier prepayment or acceleration. | ||||||||
The Partnership is required to make mandatory prepayments of the Senior Secured Credit Facilities with the proceeds of certain asset sales and debt incurrences. The Partnership may voluntarily prepay the Senior Secured Credit Facilities in whole or in part at any time without premium or penalty, except that prepayments of any portion of the Tranche A-1 or Tranche A-2 facilities made in connection with a repricing transaction (as well as any repricing of the Senior Secured Credit Facilities) prior to the six-month anniversary of the Credit Agreement closing date will incur a premium of 1.00% of amounts prepaid (or repriced). | ||||||||
The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third parties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default exists under the Credit Agreement or if the interest coverage ratio (determined as the ratio of consolidated EBITDA to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time. | ||||||||
Pursuant to the Credit Agreement, the Partnership is required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”) of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter. | ||||||||
The obligations under the Credit Agreement are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all of the Partnership’s assets. | ||||||||
Enviva, LP and Subsidiaries | ||||||||
Long-Term Debt and Capital Lease Obligations | ||||||||
(8)Long-Term Debt and Capital Lease Obligations | ||||||||
Prior Credit and Guaranty Agreement | ||||||||
In November 2012, the Company entered into a Credit and Guaranty Agreement (the “Prior Credit Agreement”) that provided for a $120.0 million aggregate principal amount of senior secured credit facilities (the “Prior Senior Secured Credit Facilities”). The Prior Senior Secured Credit Facilities consisted of (i) $35.0 million aggregate principal amount of Tranche A advances, (ii) up to $60.0 million aggregate principal amount of delayed draw term commitments, (iii) up to $15.0 million aggregate principal amount of working capital commitments and (iv) up to $10.0 million aggregate principal amount of letter of credit facility commitments. The Prior Senior Secured Credit Facilities were repaid in full, including related accrued interest, in the amount of $82.2 million on April 9, 2015, the date of the closing of the Senior Secured Credit Facilities. | ||||||||
Senior Secured Credit Facilities | ||||||||
On April 9, 2015, the Partnership entered into a Credit Agreement (the “Credit Agreement”) providing for $199.5 million aggregate principal amount of senior secured credit facilities (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities consist of (i) $99.5 million aggregate principal amount of Tranche A-1 advances, (ii) $75.0 million aggregate principal amount of Tranche A-2 advances and (iii) up to $25.0 million aggregate principal amount of revolving credit commitments. The Partnership will also be able to request loans under incremental facilities under the Credit Agreement on the terms and conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments to make loans under such incremental facilities. | ||||||||
The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilities bear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for term loan borrowings) plus an applicable margin. The applicable margin is (i) for Tranche A-1 base rate borrowings, 3.10% through April 2017, 2.95% thereafter through April 2018 and 2.80% thereafter, and for Tranche A-1 Eurodollar rate borrowings, 4.10% through April 2017, 3.95% thereafter through April 2018 and 3.80% thereafter and (ii) 3.25% for Tranche A-2 base rate borrowings and revolving facility base rate borrowings and 4.25% for Tranche A-2 Eurodollar rate borrowings and revolving facility Eurodollar rate borrowings. The applicable margin for revolving facility borrowings will be reduced by 0.50% if the Total Leverage Ratio (as defined below) is less than or equal to 2.00:1.00. During the continuance of an event of default, overdue amounts under the Senior Secured Credit Facilities will bear interest at 2.00% plus the otherwise applicable interest rate. | ||||||||
The Partnership borrowed the full amount of the Tranche A-1 and Tranche A-2 facilities at the closing of the Credit Agreement. A portion of the proceeds from borrowings under the Tranche A-1 and Tranche A-2 facilities was used to repay all outstanding indebtedness under the Prior Senior Secured Credit Facilities and related accrued interest. The remaining portion of the proceeds was used to make a distribution to the sponsor. Borrowings under the revolving facility may be used for working capital requirements and general partnership purposes, including the issuance of letters of credit. | ||||||||
The Senior Secured Credit Facilities include customary lender and agency fees, including a 1.00% fee that was paid to the lenders at the closing of the Credit Agreement and a commitment fee payable on undrawn revolving facility commitments of 0.50% per annum (subject to a stepdown to 0.375% per annum if the Total Leverage Ratio is less than or equal to 2.00:1.00). Letters of credit issued under the revolving facility are subject to a fee calculated at the applicable margin for revolving facility Eurodollar rate borrowings. | ||||||||
Interest is payable quarterly for loans bearing interest at the base rate and at the end of the applicable interest period for loans bearing interest at the Eurodollar rate. The principal amount of the Tranche A-1 facility is payable in quarterly installments of 0.50% through March 2017, 0.75% thereafter through March 2018 and 1.25% thereafter, in each case subject to a quarterly increase of 0.50% during each year if less than 75% of the aggregate projected production capacity of the wood pellet production plants for the two-year period beginning on January 1 of such year is contracted to be sold during such period pursuant to certain qualifying off-take contracts. The principal amount of the Tranche A-2 facility is payable in equal quarterly installments of 0.25%. No amortization is required with respect to the principal amount of the revolving facility. All outstanding amounts under the Senior Secured Credit Facilities will be due and the letter of credit commitments will terminate on the maturity date or upon earlier prepayment or acceleration. | ||||||||
The Partnership is required to make mandatory prepayments of the Senior Secured Credit Facilities with the proceeds of certain asset sales and debt incurrences. The Partnership may voluntarily prepay the Senior Secured Credit Facilities in whole or in part at any time without premium or penalty, except that prepayments of any portion of the Tranche A-1 or Tranche A-2 facilities made in connection with a repricing transaction (as well as any repricing of the Senior Secured Credit Facilities) prior to the six-month anniversary of the Credit Agreement closing date will incur a premium of 1.00% of amounts prepaid (or repriced). | ||||||||
The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, a change of control restriction and limitations on the Partnership’s ability to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third parties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default exists under the Credit Agreement or if the interest coverage ratio (determined as the ratio of consolidated EBITDA to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time. | ||||||||
Pursuant to the Credit Agreement, the Partnership is required to maintain, as of the last day of each fiscal quarter, a ratio of total debt to consolidated EBITDA (“Total Leverage Ratio”) of not more than a maximum ratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certain qualifying acquisitions through the end of the second full fiscal quarter thereafter. | ||||||||
The obligations under the Credit Agreement are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all of the Partnership’s assets. | ||||||||
Long-term debt, at carrying value which approximates fair value, and capital lease obligations consisted of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(unaudited) | (audited) | |||||||
Enviva, LP Prior Senior Secured Credit Facilities, Tranche A Advances, net of unamortized discount of $1.5 million as of March 31, 2015 and $1.6 million as of December 31, 2014, with quarterly interest payments. Principal payments of $0.7 million are due quarterly through June 2016, $4.6 million due quarterly September 2016 through June 2017, and the final payment of $4.4 million due on the November 9, 2017 maturity date | $ | 25,050 | $ | 29,718 | ||||
Enviva, LP Prior Senior Secured Credit Facilities, delayed draw term commitments with elected quarterly interest payments beginning the first quarter following the day that the cash was drawn or the day that the new interest period began at a Eurodollar Rate of 5.5%. Principal payments of $1.5 million are due quarterly through June 2016, $9.6 million due quarterly September 2016 through June 2017, and the final payment of $9.6 million due on the November 9, 2017 maturity date | 55,500 | 57,000 | ||||||
Enviva Pellets Wiggins construction loan, with monthly principal and interest (at an annual rate of 6.35%) payments of $32.9 and a lump sum payment of $2.4 million due on the October 18, 2016 maturity date | 2,715 | 2,770 | ||||||
Enviva Pellets Wiggins working capital line, with monthly principal and interest (at an annual rate of 6.35%) payments of $10.3 and a lump sum payment of $743.3 due on the October 18, 2016 maturity date | 847 | 864 | ||||||
Enviva Pellets Amory note, with principal and accrued interest (at an annual rate of 6.0%) due on the August 4, 2017 maturity date | 2,000 | 2,000 | ||||||
Enviva Pellets Southampton promissory note, with principal and interest in the amount of $0.9 million due on the June 8, 2017 maturity date. Present value for 3 years at an annual rate of 7.6% | 729 | 729 | ||||||
Other loans due through July 15, 2015 | 114 | 419 | ||||||
Capital leases | 519 | 575 | ||||||
Total long-term debt and capital lease obligations | 87,474 | 94,075 | ||||||
Less current portion of long-term debt and capital lease obligations | (9,514 | ) | (10,237 | ) | ||||
Long-term debt and capital lease obligations, excluding current installments | $ | 77,960 | $ | 83,838 | ||||
Related_Party_Transactions_Pre
Related Party Transactions (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Enviva, LP and Subsidiaries | ||||
Related Party Transactions | ||||
(9)Related Party Transactions | ||||
Prior Management Services Agreement | ||||
On November 9, 2012, the Company entered into a six-year management services agreement (“MSA”) with Enviva Holdings, LP (the “Service Provider”) to provide the Company with general administrative and management services and other similar services (the “Prior Services”). Under the MSA, the Company incurred the following costs: | ||||
· | A maximum annual fee in the amount of $7.2 million may be charged by the Service Provider. During the three months ended March 31, 2015, the Company incurred $2.2 million and during the three months ended March 31, 2014, the Company incurred $1.3 million for the annual fee to the Service Provider. These amounts are included in general and administrative expenses on the condensed consolidated statement of operations. | |||
· | The Company reimbursed the Service Provider for all direct or indirect costs and expenses incurred by, or chargeable to, the Service Provider in connection with the Prior Services. This included (1) the portion of the salary and benefits of employees engaged in providing the Prior Services reasonably allocable to the provision of the Prior Services, excluding those included in the annual fee, (2) the charges and expenses of any third party retained by the Service Provider to provide any portion of the Prior Services and (3) office rent and expenses and other overhead costs of the Service Provider incurred in connection with, or reasonably allocable to, providing the Prior Services (collectively, “Reimbursable Expenses”). During the three months ended March 31, 2015, the Company incurred $0.8 million of Reimbursable Expenses to the Service Provider of which $0.8 million is included in general and administrative expenses and an insignificant amount is included in in cost of goods sold on the condensed consolidated statement of operations. During the three months ended March 31, 2014, the Company incurred $0.8 million of Reimbursable Expenses to the Service Provider of which $0.6 million is included in general and administrative expenses and $0.2 million is included in cost of goods sold on the condensed consolidated statement of operations. | |||
As of March 31, 2015 and December 31, 2014, the Company had $2.5 million and $2.4 million, respectively, related to the MSA included in related party payable on the condensed consolidated balance sheet. | ||||
During the three months ended March 31, 2015 and 2014, the Company capitalized $0.9 million and $0.5 million respectively, of deferred issuance costs that were paid by the Service Provider. Deferred issuance costs, which consist of direct incremental legal and professional accounting fees relating to an offering, are capitalized. The deferred issuance costs will be offset against proceeds upon the consummation of an offering. The amounts were treated as capital contributions. | ||||
During the three months ended March 31, 2015, the Company recorded $0.5 million of general and administrative expenses that were incurred by the Service Provider and recorded as a capital contribution. The Company did not record any general and administrative expenses that were incurred by the Service Provider during the three months ended March 31, 2014. The MSA automatically terminated upon the execution of the New MSA. | ||||
Management Services Agreement | ||||
On April 9, 2015, the Partnership, Enviva Partners GP, LLC, the general partner of the Partnership, the Predecessor, Enviva GP, LLC and certain subsidiaries of the Predecessor (collectively, the “Service Recipients”) entered into a five-year Management Services Agreement (the “New MSA”) with Enviva Management Company, LLC (the “Provider”), a subsidiary of Enviva Holdings, LP, pursuant to which the Provider provides the Service Recipients with general administrative and management services and other similar services (the “Services”). Under the terms of the New MSA, the Service Recipients are required to reimburse the Provider the amount of all direct or indirect, internal or third-party expenses incurred, including without limitation: (i) the portion of the salary and benefits of the employees engaged in providing the Services reasonably allocable to the Service Recipients; (ii) the charges and expenses of any third party retained to provide any portion of the Services; (iii) office rent and expenses and other overhead costs incurred in connection with, or reasonably allocable to, providing the Services; (iv) amounts related to the payment of taxes related to the business of the Service Recipients; and (v) costs and expenses incurred in connection with the formation, capitalization, business or other activities of the Provider pursuant to the New MSA. | ||||
Direct or indirect, internal or third-party expenses incurred are either directly identifiable or allocated to the Partnership by the Provider. The general method used to allocate these expenses is established through the annual budgeting process. The Provider estimates the percentage of salary, benefits, third-party costs, office rent and expenses and any other overhead costs associated with the Services to be provided to the Partnership. Each month, the Provider allocates the actual costs accumulated in the financial accounting system based on the estimated budgeted percentage for each type of cost. The Provider charges the Partnership for any directly identifiable costs such as goods or services provided at the Partnership’s request. | ||||
Enviva Pellets Cottondale, LLC | ||||
Enviva Pellets Cottondale, LLC (“Enviva Cottondale”) was purchased by the sponsor in January 2015 and contributed to the Partnership in April 2015. During the three months ended March 31, 2015, the Company purchased $8.0 million of wood pellets from Enviva Cottondale. As of March 31, 2015 and December 31, 2014, the Company had $3.1 million and $0, respectively, included in related party payable on the condensed consolidated balance sheet related to the purchase of wood pellets from Enviva Cottondale. | ||||
Subsequent_Events_Predecessor
Subsequent Events (Predecessor) (Enviva, LP and Subsidiaries) | 3 Months Ended |
Mar. 31, 2015 | |
Enviva, LP and Subsidiaries | |
Subsequent Events | |
(10)Subsequent Events | |
Initial Public Offering of Enviva Partners, LP | |
On May 4, 2015, the Partnership completed an initial public offering of 11,500,000 common units representing limited partner interests in the Partnership at a price to the public of $20.00 per unit ($18.80 per common unit, net of the underwriting discount) and constituting approximately 48.3% of the Partnership’s outstanding limited partner interests. The IPO was made pursuant to a registration statement on Form S-1 originally filed on October 27, 2014, as amended (Registration No. 333-199625), that was declared effective by the SEC on April 28, 2015. On April 29, 2015, the underwriters exercised their option to purchase an additional 1,500,000 common units. The net proceeds from the IPO of approximately $215.1 million after deducting the underwriting discount and structuring fee were used to (i) repay intercompany indebtedness related to the acquisition of Green Circle in the amount of approximately $83.0 million and (ii) distribute approximately $86.7 million to the Partnership’s sponsor related to its contribution of assets to the Partnership in connection with the IPO, with the Partnership retaining $45.4 million for general partnership purposes, including offering expenses. | |
Enviva Holdings owns 51.7% of the limited partner interests in the Partnership through 405,138 common units and all of the Partnership’s subordinated units, as well as the incentive distribution rights. | |
Significant_Accounting_Policie1
Significant Accounting Policies (Predecessor) (Policies) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||
Mar. 31, 2015 | ||||
Enviva, LP and Subsidiaries | ||||
Use of Estimates | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in the Company’s unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | ||||
Segment and Geographic Information | ||||
Segment and Geographic Information | ||||
Operating segments are defined as components of an enterprise about which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment. All long-lived assets of the Company are located in the United States. | ||||
Other Comprehensive Income (Loss) | ||||
Other Comprehensive Income (Loss) | ||||
Comprehensive loss includes net loss and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of partners’ capital but are excluded from net loss. The Company had no components of other comprehensive income (loss) for the three months ended March 31, 2015 and 2014. | ||||
Cash and Cash Equivalents | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents consist of short-term, highly liquid investments readily convertible into cash with an original maturity of three months or less. | ||||
Restricted Cash | ||||
Restricted Cash | ||||
The Company funded a restricted debt service reserve account in connection with its Prior Senior Secured Credit Facilities (see Note 8, Long-Term Debt and Capital Lease Obligations). The Prior Credit Agreement (as defined below) required the Company to fund a restricted debt service reserve account according to a debt service reserve requirement minimum. As of March 31, 2015 and December 31, 2014, the Company had $7.6 million and $11.6 million, respectively, deposited to the restricted debt service reserve account. | ||||
Revenue Recognition | ||||
Revenue Recognition | ||||
The Company primarily earns revenue by supplying wood pellets to customers under long-term, U.S. dollar-denominated contracts (also referred to as “off-take” contracts). The Company refers to the structure of the contracts as “take-or-pay” because they include a firm obligation to take a fixed quantity of product at a stated price and provisions that ensure the Company will be made whole in the case of the customer’s failure to accept all or a part of the contracted volumes or for termination by the customer. Each contract defines the annual volume of wood pellets that the customer is required to purchase and the Company is required to sell, the fixed-price per metric ton for product satisfying a base net calorific value and other technical specifications, and, in some instances, provides for price adjustments for actual product specification and changes in underlying costs. Revenues from the sale of wood pellets are recognized when the goods are shipped, title passes, the sales price to the customer is fixed and collectability is reasonably assured. | ||||
Depending on the specific off-take contract, shipping terms are either Cost, Insurance and Freight (“CIF”) or Free on Board (“FOB”). Under a CIF contract, the Company procures and pays for shipping costs which include insurance and all other charges up to the port of destination for the customer. These costs are included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under a FOB contract, the customer is directly responsible for shipping costs. | ||||
In some cases, the Company may purchase shipments of product from a third-party supplier and resell them in back-to-back transactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from these transactions is recorded net of costs paid to the third-party supplier. The Company records this revenue as “Other revenue.” | ||||
In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may pay a fee, including reimbursement of any incremental costs incurred by the Company, which is included in revenue. | ||||
Cost of Goods Sold | ||||
Cost of Goods Sold | ||||
Cost of goods sold includes the costs to produce and deliver wood pellets to customers. Raw material, production and distribution costs associated with delivering wood pellets to the ports and third-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normal capacity of the facilities. These costs are reflected in costs of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets to customers and amortization are expensed as incurred. Inventory is recorded using FIFO which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of costs of goods sold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition of inventory that is sold to each customer. | ||||
Additionally, the purchase price of an acquired customer contract that was recorded as an intangible asset is amortized as deliveries are made during the contract term. | ||||
Debt Issuance Costs and Original Issue Discount | ||||
Debt Issuance Costs and Original Issue Discount | ||||
The Predecessor incurred debt issuance costs and original issue discount in connection with the Prior Senior Secured Credit Facilities (see Note 8, Long-Term Debt and Capital Lease Obligations), which included legal fees and other direct expenses. | ||||
Deferred Issuance Costs | ||||
Deferred Issuance Costs | ||||
Deferred issuance costs, primarily consisting of legal, accounting, printing and other fees relating to a initial public offering, are capitalized. In the event an offering is terminated, the deferred issuance costs will be expensed. As of March 31, 2015 and December 31, 2014, the Company had capitalized $5.0 million and $4.1 million of deferred issuance costs, respectively. | ||||
Impairment of Long-Lived Assets | ||||
Impairment of Long-Lived Assets | ||||
Long-lived assets, such as property, plant and equipment and amortizable intangible assets, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’s carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | ||||
Fair Value Measurements | ||||
Fair Value Measurements | ||||
The Company applies authoritative accounting guidance for fair value measurements of financial and nonfinancial assets and liabilities. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: | ||||
· | Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. | |||
· | Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | |||
· | Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. | |||
Recent and Pending Accounting Pronouncements | ||||
Recent and Pending Accounting Pronouncements | ||||
In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Interest-Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 requires the presentation of debt issuance costs in the balance sheet as a reduction from the related debt liability rather than as an asset. The amortization of such costs will continue to be reported as interest expense. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and allows early adoption for financial statements that have not been previously issued. The update requires retrospective application upon adoption. The Company is currently evaluating the impact of this accounting standard. | ||||
In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new standard reduces the number of consolidation models and simplifies their application. The amendments in ASU No. 2015-02 are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations and securitization structures. The amendments simplify the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) eliminate the presumption that a general partner should consolidate a limited partnership, (2) eliminate the indefinite deferral of FASB Statement No. 167, thereby reducing the number of variable interest entity (“VIE”) consolidation models from four to two (including the limited partnership consolidation model), (3) clarify when fees paid to a decision maker should be a factor to include in the consolidation of VIEs, (4) amend the guidance for assessing how related party relationships affect VIE consolidation analysis and (5) exclude certain money market funds from the consolidation guidance. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The standard allows early adoption, including early adoption in an interim period. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. | ||||
In January 2015, the FASB issued ASU No. 2015-01, Income Statement-Extraordinary and Unusual Items. The new standard eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU No. 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. The standard is effective for periods beginning after December 15, 2015 and early adoption is permitted. The adoption of ASU No. 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. | ||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. The new standard provides new guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods or services transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. The new standard also requires significantly expanded disclosure regarding qualitative and quantitative information about the nature, timing and uncertainty of revenue and cash flow arising from contracts with customers. On April 1, 2015, the FASB voted to propose a one-year delay in the effective date of ASU No. 2014-09, and it is expected to become effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is not permitted. The standard permits the use of either applying retrospectively the amendment to each prior reporting period presented or retrospectively with the cumulative effect of initially applying at the date of initial application. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements and has not determined which implementation method will be adopted. The Company’s adoption is not expected to have a material effect on the recognition of revenue. | ||||
Property_Plant_and_Equipment_P1
Property, Plant and Equipment (Predecessor) (Tables) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Enviva, LP and Subsidiaries | ||||||||
Schedule of property, plant and equipment | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Land | $ | 11,984 | $ | 11,984 | ||||
Land improvements | 25,106 | 24,899 | ||||||
Buildings | 57,345 | 57,275 | ||||||
Machinery and equipment | 259,731 | 259,186 | ||||||
Vehicles | 768 | 768 | ||||||
Furniture and office equipment | 1,820 | 1,736 | ||||||
356,754 | 355,848 | |||||||
Less accumulated depreciation | (45,633 | ) | (40,858 | ) | ||||
311,121 | 314,990 | |||||||
Construction in progress | 1,155 | 1,269 | ||||||
Total property, plant and equipment, net | $ | 312,276 | $ | 316,259 | ||||
Inventories_Predecessor_Tables
Inventories (Predecessor) (Tables) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Enviva, LP and Subsidiaries | ||||||||
Schedule of inventories | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Raw materials and work-in-process | $ | 6,100 | $ | 6,880 | ||||
Consumable tooling | 7,479 | 6,934 | ||||||
Finished goods | 5,054 | 4,250 | ||||||
Total inventories | $ | 18,633 | $ | 18,064 | ||||
Derivative_Instruments_Predece1
Derivative Instruments (Predecessor) (Tables) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Enviva, LP and Subsidiaries | ||||||||||||
Schedule of interest rate swaps | ||||||||||||
Interest Rate Swap | Fixed Rate | Floating Rate | Maturity | 31-Mar-15 | ||||||||
(Notional Value) | Percentage | Percentage | Fair Value | |||||||||
$ | 29,438 | 1.48 | % | 1.25 | % | 24-Dec-15 | $ | (49 | ) | |||
29,438 | 1.493 | % | 1.25 | % | 30-Dec-16 | (75 | ) | |||||
$ | (124 | ) | ||||||||||
Interest Rate Swap | Fixed Rate | Floating Rate | Maturity | 31-Dec-14 | ||||||||
(Notional Value) | Percentage | Percentage | Fair Value | |||||||||
$ | 30,234 | 1.48 | % | 1.25 | % | 24-Dec-15 | $ | (63 | ) | |||
30,234 | 1.493 | % | 1.25 | % | 30-Dec-16 | (38 | ) | |||||
$ | (101 | ) | ||||||||||
LongTerm_Debt_and_Capital_Leas1
Long-Term Debt and Capital Lease Obligations (Predecessor) (Tables) (Enviva, LP and Subsidiaries) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Enviva, LP and Subsidiaries | ||||||||
Schedule of long-term debt and capital lease obligations | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(unaudited) | (audited) | |||||||
Enviva, LP Prior Senior Secured Credit Facilities, Tranche A Advances, net of unamortized discount of $1.5 million as of March 31, 2015 and $1.6 million as of December 31, 2014, with quarterly interest payments. Principal payments of $0.7 million are due quarterly through June 2016, $4.6 million due quarterly September 2016 through June 2017, and the final payment of $4.4 million due on the November 9, 2017 maturity date | $ | 25,050 | $ | 29,718 | ||||
Enviva, LP Prior Senior Secured Credit Facilities, delayed draw term commitments with elected quarterly interest payments beginning the first quarter following the day that the cash was drawn or the day that the new interest period began at a Eurodollar Rate of 5.5%. Principal payments of $1.5 million are due quarterly through June 2016, $9.6 million due quarterly September 2016 through June 2017, and the final payment of $9.6 million due on the November 9, 2017 maturity date | 55,500 | 57,000 | ||||||
Enviva Pellets Wiggins construction loan, with monthly principal and interest (at an annual rate of 6.35%) payments of $32.9 and a lump sum payment of $2.4 million due on the October 18, 2016 maturity date | 2,715 | 2,770 | ||||||
Enviva Pellets Wiggins working capital line, with monthly principal and interest (at an annual rate of 6.35%) payments of $10.3 and a lump sum payment of $743.3 due on the October 18, 2016 maturity date | 847 | 864 | ||||||
Enviva Pellets Amory note, with principal and accrued interest (at an annual rate of 6.0%) due on the August 4, 2017 maturity date | 2,000 | 2,000 | ||||||
Enviva Pellets Southampton promissory note, with principal and interest in the amount of $0.9 million due on the June 8, 2017 maturity date. Present value for 3 years at an annual rate of 7.6% | 729 | 729 | ||||||
Other loans due through July 15, 2015 | 114 | 419 | ||||||
Capital leases | 519 | 575 | ||||||
Total long-term debt and capital lease obligations | 87,474 | 94,075 | ||||||
Less current portion of long-term debt and capital lease obligations | (9,514 | ) | (10,237 | ) | ||||
Long-term debt and capital lease obligations, excluding current installments | $ | 77,960 | $ | 83,838 | ||||
Description_of_Business_and_Ba3
Description of Business and Basis of Presentation (Predecessor) (Details) (USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Apr. 09, 2015 | 4-May-15 |
item | ||
Subsequent Event | ||
Number of industrial-scale production wood pellet production plants | 5 | |
Prior Senior Secured Credit Facilities | Subsequent Event | ||
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest | 82.2 | |
Enviva Cottondale Acquisition II, LLC | Subsequent Event | ||
Percentage of interest in subsidiaries | 100.00% | |
Enviva, LP and Subsidiaries | Subsequent Event | ||
Number of industrial-scale production wood pellet production plants | 5 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | ||
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest | 82.2 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Subsequent Event | ||
Repayment of outstanding indebtedness under the Credit Facility and related accrued interest | 82.2 | |
Enviva, LP and Subsidiaries | Enviva Pellets Southampton, LLC | Subsequent Event | ||
Percentage of interest in subsidiaries | 100.00% | |
Enviva, LP and Subsidiaries | Enviva Holdings, LP | Subsequent Event | ||
Cash and cash equivalents distributed to sponsor | 1.7 | |
Accounts receivable distributed to sponsor | 2.4 | |
Enviva, LP and Subsidiaries | Enviva Cottondale Acquisition II, LLC | Subsequent Event | ||
Percentage of interest in subsidiaries | 100.00% |
Significant_Accounting_Policie2
Significant Accounting Policies (Predecessor) (Details) (Enviva, LP and Subsidiaries, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
segment | ||
Enviva, LP and Subsidiaries | ||
Segment and Geographic Information | ||
Number of operating segments | 1 | |
Restricted Cash | ||
Restricted cash | $7,640 | $11,640 |
Deferred Issuance Costs | ||
Deferred issuance costs | $4,952 | $4,052 |
Significant_Risks_and_Uncertai1
Significant Risks and Uncertainties Including Business and Credit Concentrations (Predecessor) (Details) (Enviva, LP and Subsidiaries, Product Sales, Customer, Three major customers) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
customer | customer | |
Enviva, LP and Subsidiaries | Product Sales | Customer | Three major customers | ||
Concentration Risk | ||
Number of customers | 3 | 3 |
Concentration risk (as a percent) | 100.00% | 97.00% |
Property_Plant_and_Equipment_P2
Property, Plant and Equipment (Predecessor) (Details) (Enviva, LP and Subsidiaries, USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | $356,754,000 | $355,848,000 | |
Less accumulated depreciation | -45,633,000 | -40,858,000 | |
Property, plant and equipment excluding construction in progress | 311,121,000 | 314,990,000 | |
Construction in progress | 1,155,000 | 1,269,000 | |
Total property, plant and equipment, net | 312,276,000 | 316,259,000 | |
Total depreciation expense | 4,600,000 | 4,800,000 | |
Land | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 11,984,000 | 11,984,000 | |
Land improvements | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 25,106,000 | 24,899,000 | |
Buildings | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 57,345,000 | 57,275,000 | |
Machinery and equipment | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 259,731,000 | 259,186,000 | |
Vehicles | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 768,000 | 768,000 | |
Furniture and office equipment | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | $1,820,000 | $1,736,000 |
Inventories_Predecessor_Detail
Inventories (Predecessor) (Details) (Enviva, LP and Subsidiaries, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Enviva, LP and Subsidiaries | ||
Raw materials and work-in-progress | $6,100 | $6,880 |
Consumable tooling | 7,479 | 6,934 |
Finished goods | 5,054 | 4,250 |
Total inventories | $18,633 | $18,064 |
Derivative_Instruments_Predece2
Derivative Instruments (Predecessor) (Details) (Enviva, LP and Subsidiaries, Interest Rate Swap, USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Derivative Instruments | ||
Minimum swap percent of term loan outstanding balance | 50.00% | |
Fair Value | ($124) | ($101) |
24-Dec-15 | ||
Derivative Instruments | ||
Notional Value | 29,438 | 30,234 |
Fixed Rate Percentage | 1.48% | 1.48% |
Floating Rate Percentage | 1.25% | 1.25% |
Fair Value | -49 | -63 |
30-Dec-16 | ||
Derivative Instruments | ||
Notional Value | 29,438 | 30,234 |
Fixed Rate Percentage | 1.49% | 1.49% |
Floating Rate Percentage | 1.25% | 1.25% |
Fair Value | ($75) | ($38) |
LongTerm_Debt_and_Capital_Leas2
Long-Term Debt and Capital Lease Obligations (Predecessor) (Details) (USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Apr. 09, 2015 | Nov. 30, 2012 |
Prior Senior Secured Credit Facilities | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Repayment of credit facilities in full including related accrued interest | $82.20 | |
Senior Secured Credit Facilities | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 199.5 | |
Floor rate for Eurodollar term loan borrowings | 1.00% | |
Reduction in floating interest rate for revolving facility borrowings based on leverage ratio (as a percent) | 0.50% | |
Extra interest in an event of default (as a percent) | 2.00% | |
Fee paid to lenders at closing of Credit Agreement (as a percent) | 1.00% | |
Prepayment premium or penalty amount (as a percent) | 1.00% | |
Step down in Leverage Ratio | 3.75% | |
Increase in Leverage Ratio | 0.5 | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 99.5 | |
Increase in quarterly installments of principal payable based on achieving targeted wood pellet production (as a percent) | 0.50% | |
Aggregate wood pellet production capacity for determining additional quarterly principal payments (as a percent) | 75.00% | |
Period for aggregate wood pellet production capacity (in years) | 2 years | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | Through March 2017 | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 0.50% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After March 2017 through March 2018 | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 0.75% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After March 2018 through thereafter | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 1.25% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | Through April 2017 | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.10% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | Through April 2017 | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 4.10% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2017 through April 2018 | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 2.95% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2017 through April 2018 | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.95% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2018 through thereafter | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 2.80% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2018 through thereafter | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.80% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-2 advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 75 | |
Quarterly installments of principal payable (as a percent) | 0.25% | |
Senior Secured Credit Facilities | Subsequent Event | Revolving credit commitments | ||
Long term debt and capital lease obligations | ||
Commitment fee payable on undrawn commitments (as a percent) | 0.50% | |
Reduction in commitment fee payable on undrawn commitments based on total leverage ratio (as a percent) | 0.38% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-2 and revolving facility borrowings | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.25% | |
Senior Secured Credit Facilities | Subsequent Event | Tranche A-2 and revolving facility borrowings | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 4.25% | |
Senior Secured Credit Facilities | Minimum | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Period from closing of the credit agreement for prepayment of debt resulting in a premium or penalty payment (in months) | 6 months | |
Interest coverage ratio | 2.25 | |
Senior Secured Credit Facilities | Maximum | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Leverage Ratio required for reduction in margin rate | 2 | |
Initial Leverage Ratio | 4.25 | |
Senior Secured Credit Facilities | Maximum | Subsequent Event | Revolving credit commitments | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 25 | |
Leverage Ratio required for reduction in margin rate | 2 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 120 | |
Repayment of credit facilities in full including related accrued interest | 82.2 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Tranche A Advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 35 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Repayment of credit facilities in full including related accrued interest | 82.2 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Maximum | Delayed Draw Term Commitments | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 60 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Maximum | Working Capital Commitments | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 15 | |
Enviva, LP and Subsidiaries | Prior Senior Secured Credit Facilities | Maximum | Letter of credit facility commitments | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 10 | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 199.5 | |
Floor rate for Eurodollar term loan borrowings | 1.00% | |
Reduction in floating interest rate for revolving facility borrowings based on leverage ratio (as a percent) | 0.50% | |
Extra interest in an event of default (as a percent) | 2.00% | |
Fee paid to lenders at closing of Credit Agreement (as a percent) | 1.00% | |
Prepayment premium or penalty amount (as a percent) | 1.00% | |
Step down in Leverage Ratio | 3.75% | |
Increase in Leverage Ratio | 0.5 | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 99.5 | |
Increase in quarterly installments of principal payable based on achieving targeted wood pellet production (as a percent) | 0.50% | |
Aggregate wood pellet production capacity for determining additional quarterly principal payments (as a percent) | 75.00% | |
Period for aggregate wood pellet production capacity (in years) | 2 years | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | Through March 2017 | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 0.50% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After March 2017 through March 2018 | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 0.75% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After March 2018 through thereafter | ||
Long term debt and capital lease obligations | ||
Quarterly installments of principal payable (as a percent) | 1.25% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | Through April 2017 | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.10% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | Through April 2017 | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 4.10% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2017 through April 2018 | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 2.95% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2017 through April 2018 | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.95% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2018 through thereafter | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 2.80% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-1 advances | After April 2018 through thereafter | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.80% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-2 advances | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | 75 | |
Quarterly installments of principal payable (as a percent) | 0.25% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Revolving credit commitments | ||
Long term debt and capital lease obligations | ||
Commitment fee payable on undrawn commitments (as a percent) | 0.50% | |
Reduction in commitment fee payable on undrawn commitments based on total leverage ratio (as a percent) | 0.38% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-2 and revolving facility borrowings | Base rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 3.25% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Subsequent Event | Tranche A-2 and revolving facility borrowings | Eurodollar rate | ||
Long term debt and capital lease obligations | ||
Floating interest rate (as a percent) | 4.25% | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Minimum | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Period from closing of the credit agreement for prepayment of debt resulting in a premium or penalty payment (in months) | 6 months | |
Interest coverage ratio | 2.25 | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Maximum | Subsequent Event | ||
Long term debt and capital lease obligations | ||
Leverage Ratio required for reduction in margin rate | 2 | |
Initial Leverage Ratio | 4.25 | |
Enviva, LP and Subsidiaries | Senior Secured Credit Facilities | Maximum | Subsequent Event | Revolving credit commitments | ||
Long term debt and capital lease obligations | ||
Aggregate principal amount | $25 | |
Leverage Ratio required for reduction in margin rate | 2 |
LongTerm_Debt_and_Capital_Leas3
Long-Term Debt and Capital Lease Obligations (Predecessor) (Details 2) (Enviva, LP and Subsidiaries, USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Long term debt | ||
Capital Lease Obligations | $519,000 | $575,000 |
Total long-term debt and capital lease obligations | 87,474,000 | 94,075,000 |
Less current portion of long-term debt and capital lease obligations | -9,514,000 | -10,237,000 |
Long-term debt and capital lease obligations, excluding current installments | 77,960,000 | 83,838,000 |
Enviva Pellets Wiggins construction loan | ||
Long term debt | ||
Long-term Debt | 2,715,000 | 2,770,000 |
Payment of principal and interest | 32,900 | |
lump sum payment on October 18, 2016 | 2,400,000 | |
Annual rate (as a percent) | 6.35% | |
Enviva Pellets Wiggins working capital line | ||
Long term debt | ||
Long-term Debt | 847,000 | 864,000 |
Payment of principal and interest | 10,300 | |
lump sum payment on October 18, 2016 | 743,300 | |
Annual rate (as a percent) | 6.35% | |
Enviva Pellets Amory note | ||
Long term debt | ||
Long-term Debt | 2,000,000 | 2,000,000 |
Annual rate (as a percent) | 6.00% | |
Enviva Pellets Southampton promissory note | ||
Long term debt | ||
Long-term Debt | 729,000 | 729,000 |
Payment of principal and interest | 900,000 | |
Annual imputed rate (as a percent) | 7.60% | |
Present value period | 3 years | |
Other loans | ||
Long term debt | ||
Long-term Debt | 114,000 | 419,000 |
Prior Senior Secured Credit Facilities | Tranche A Advances | ||
Long term debt | ||
Long-term Debt | 25,050,000 | 29,718,000 |
Unamortized discount | 1,500,000 | 1,600,000 |
Quarterly principal payments through June 2016 | 700,000 | |
Quarterly principal payments September 2016 through June 2017 | 4,600,000 | |
Final principal payment on November 9, 2017 | 4,400,000 | |
Prior Senior Secured Credit Facilities | Delayed Draw Term Commitments | ||
Long term debt | ||
Long-term Debt | 55,500,000 | 57,000,000 |
Quarterly principal payments through June 2016 | 1,500,000 | |
Quarterly principal payments September 2016 through June 2017 | 9,600,000 | |
Final principal payment on November 9, 2017 | $9,600,000 | |
Prior Senior Secured Credit Facilities | Delayed Draw Term Commitments | Eurodollar rate | ||
Long term debt | ||
Interest rate (as a percent) | 5.50% |
Related_Party_Transactions_Pre1
Related Party Transactions (Predecessor) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | |
Apr. 09, 2015 | Mar. 31, 2015 | Nov. 09, 2012 | Mar. 31, 2014 | Dec. 31, 2014 | |
New MSA | Subsequent Event | |||||
Related Party Transaction | |||||
Term of agreement | 5 years | ||||
Enviva, LP and Subsidiaries | |||||
Related Party Transaction | |||||
Amount due to related party | $5,639,000 | $2,354,000 | |||
Enviva, LP and Subsidiaries | Cottondale | |||||
Related Party Transaction | |||||
Amount due to related party | 3,100,000 | 0 | |||
Purchase of wood pellets | 8,000,000 | ||||
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | |||||
Related Party Transaction | |||||
Term of agreement | 6 years | ||||
Reimbursable expenses incurred | 800,000 | 800,000 | |||
Amount due to related party | 2,500,000 | 2,400,000 | |||
Capitalized deferred issuance costs | 900,000 | 500,000 | |||
Capital contributions | 500,000 | ||||
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | General and administrative expenses | |||||
Related Party Transaction | |||||
Annual fee expensed | 2,200,000 | 1,300,000 | |||
Reimbursable expenses incurred | 800,000 | 600,000 | |||
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | Cost of goods sold. | |||||
Related Party Transaction | |||||
Reimbursable expenses incurred | 200,000 | ||||
Enviva, LP and Subsidiaries | Prior MSA | Enviva Holdings, LP. | Maximum | |||||
Related Party Transaction | |||||
Annual fee | 7,200,000 | ||||
Enviva, LP and Subsidiaries | New MSA | Enviva Management Company, LLC | Subsequent Event | |||||
Related Party Transaction | |||||
Term of agreement | 5 years |
Subsequent_Events_Predecessor_
Subsequent Events (Predecessor) (Details) (Subsequent Event, USD $) | 0 Months Ended | |
In Millions, except Share data, unless otherwise specified | 4-May-15 | Apr. 29, 2015 |
Subsequent Events | ||
Ownership interest by Non-controlling interest (as a percent) | 48.30% | |
Net proceeds from issuance | $215.10 | |
Repayment of intercompany indebtedness | 83 | |
Distributions to partnership sponsor | 86.7 | |
Amount retained for general purposes | 45.4 | |
Common Stock | ||
Subsequent Events | ||
Number of common units owned by the Sponsor | 405,138 | |
IPO | Common Stock | ||
Subsequent Events | ||
Shares issued | 11,500,000 | |
Share price (in dollars per share) | $20 | |
Share price, net of underwriting discounts (in dollars per share) | $18.80 | |
Over-Allotment Option | Common Stock | ||
Subsequent Events | ||
Shares issued | 1,500,000 | |
Enviva Holdings, LP | Common Stock | ||
Subsequent Events | ||
Ownership interest (as a percent) | 51.70% | |
Enviva, LP and Subsidiaries | ||
Subsequent Events | ||
Ownership interest by Non-controlling interest (as a percent) | 48.30% | |
Net proceeds from issuance | 215.1 | |
Repayment of intercompany indebtedness | 83 | |
Distributions to partnership sponsor | 86.7 | |
Amount retained for general purposes | $45.40 | |
Enviva, LP and Subsidiaries | Common Stock | ||
Subsequent Events | ||
Number of common units owned by the Sponsor | 405,138 | |
Enviva, LP and Subsidiaries | IPO | Common Stock | ||
Subsequent Events | ||
Shares issued | 11,500,000 | |
Share price (in dollars per share) | $20 | |
Share price, net of underwriting discounts (in dollars per share) | $18.80 | |
Enviva, LP and Subsidiaries | Over-Allotment Option | Common Stock | ||
Subsequent Events | ||
Shares issued | 1,500,000 | |
Enviva, LP and Subsidiaries | Enviva Holdings, LP | Common Stock | ||
Subsequent Events | ||
Ownership interest (as a percent) | 51.70% |