Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37363 | |
Entity Registrant Name | Enviva Partners, LP | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4097730 | |
Entity Address, Address Line One | 7200 Wisconsin Ave. | |
Entity Address, Address Line Two | Suite 1000 | |
Entity Address, City or Town | Bethesda, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20814 | |
City Area Code | (301) | |
Local Phone Number | 657-5560 | |
Title of 12(b) Security | Common Units | |
Trading Symbol | EVA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,605,138 | |
Entity Central Index Key | 0001592057 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 5,311 | $ 9,053 |
Accounts receivable | 79,637 | 72,421 |
Inventories | 40,506 | 32,998 |
Prepaid expenses and other current assets | 7,380 | 5,617 |
Total current assets | 132,834 | 120,089 |
Property, plant and equipment, net | 766,862 | 751,780 |
Operating lease right-of-use assets | 32,270 | 32,830 |
Goodwill | 85,615 | 85,615 |
Other long-term assets | 7,940 | 4,504 |
Total assets | 1,025,521 | 994,818 |
Current liabilities: | ||
Accounts payable | 32,636 | 18,985 |
Related-party payables, net | 2,480 | 304 |
Deferred consideration for drop-down due to related-party | 0 | 40,000 |
Accrued and other current liabilities | 50,370 | 59,066 |
Current portion of interest payable | 13,667 | 3,427 |
Current portion of long-term debt and finance lease obligations | 7,583 | 6,590 |
Total current liabilities | 106,736 | 128,372 |
Long-term debt and finance lease obligations | 667,785 | 596,430 |
Long-term operating lease liabilities | 33,228 | 33,469 |
Other long-term liabilities | 2,924 | 3,971 |
Total liabilities | 810,673 | 762,242 |
Commitments and contingencies | ||
Limited partners: | ||
Common unitholders—public (20,018,763 and 19,870,436 units issued and outstanding at March 31, 2020 and December 31, 2019, respectively) | 289,758 | 300,184 |
Common unitholder—sponsor (13,586,375 units issued and outstanding at March 31, 2020 and December 31, 2019) | 74,887 | 82,300 |
General partner (no outstanding units) | (101,611) | (101,739) |
Accumulated other comprehensive income | 6 | 23 |
Total Enviva Partners, LP partners’ capital | 263,040 | 280,768 |
Noncontrolling interest | (48,192) | (48,192) |
Total partners' capital | 214,848 | 232,576 |
Total liabilities and partners’ capital | $ 1,025,521 | $ 994,818 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Mar. 31, 2020 | Dec. 31, 2019 |
Limited Partner-Common Units— Public | ||
Limited partner units issued | 20,018,763 | 19,870,436 |
Limited partner units outstanding | 20,018,763 | 19,870,436 |
Limited Partner-Common Units— Sponsor | ||
Limited partner units issued | 13,586,375 | 13,586,375 |
Limited partner units outstanding | 13,586,375 | 13,586,375 |
General Partner Interest | ||
General partner units outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Net revenue | $ 204,477 | $ 158,369 | |
Depreciation and amortization | 13,640 | 11,070 | |
Total cost of goods sold | 177,170 | 148,462 | |
Gross margin | 27,307 | 9,907 | |
General and administrative expenses | 1,763 | 3,541 | |
Related-party management services agreement fee | 7,689 | 6,296 | |
Total general and administrative expenses | 9,452 | 9,837 | |
Income from operations | 17,855 | 70 | |
Other income (expense): | |||
Interest expense | (10,394) | (9,633) | |
Other income, net | 172 | 640 | |
Total other expense, net | (10,222) | (8,993) | |
Net income (loss) | $ 7,633 | $ (8,923) | |
Net income (loss) per limited partner common unit: | |||
Common - basic (in dollars per unit) | $ 0.10 | $ (0.42) | |
Common - diluted (in dollars per unit) | $ 0.09 | $ (0.42) | |
Weighted-average number of limited partner units outstanding: | |||
Common - basic (in units) | 33,551 | 26,759 | |
Common - diluted (in units) | 35,436 | 26,759 | |
Product sales | |||
Net revenue | $ 197,853 | $ 156,599 | |
Cost of goods sold | [1] | 163,530 | 137,392 |
Other revenue | |||
Net revenue | [1] | $ 6,624 | $ 1,770 |
[1] | See Note 12, Related-Party Transactions |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 7,633 | $ (8,923) |
Other comprehensive income (loss): | ||
Net unrealized losses on cash flow hedges | 0 | (55) |
Reclassification of net gains on cash flow hedges realized into net income (loss) | (20) | (107) |
Currency translation adjustment | 3 | 0 |
Total other comprehensive loss | (17) | (162) |
Total comprehensive income (loss) | $ 7,616 | $ (9,085) |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Changes in Partners’ Capital - USD ($) $ in Thousands | Total | Accumulated Other Comprehensive Income (Loss) | General Partner Interest | Common Units— Public | Common Units— Sponsor | Non-Controlling Interest |
Balance at the beginning of the period at Dec. 31, 2018 | $ 146,716 | $ 439 | $ (133,687) | $ 207,612 | $ 72,352 | |
Balance at the beginning of the period (in units) at Dec. 31, 2018 | 14,573,000 | 11,905,000 | ||||
Changes in Partners’ Capital | ||||||
Distributions to unitholders, distribution equivalent and incentive distribution rights | (19,559) | (1,671) | $ (10,269) | $ (7,619) | ||
Issuance of units through Long-Term Incentive Plan | (1,470) | (2,129) | $ 659 | |||
Issuance of units through Long-Term Incentive Plan (in units) | 94,000 | |||||
Issuance of common units, net | 96,661 | $ 96,661 | ||||
Issuance of common units, net (in units) | 3,509,000 | |||||
Non-cash Management Services Agreement expenses | 2,208 | 136 | $ 2,072 | |||
Other comprehensive loss | (162) | (162) | ||||
Net income (loss) | (8,923) | 1,671 | (5,880) | (4,714) | ||
Balance at the end of the period at Mar. 31, 2019 | 215,471 | 295 | (135,680) | $ 290,845 | $ 60,011 | |
Balance at the end of the period (in units) at Mar. 31, 2019 | 18,176,000 | 11,905,000 | ||||
Changes in Partners’ Capital | ||||||
Cumulative effect of accounting change - derivative instruments | 0 | 18 | $ (10) | $ (8) | ||
Balance at the beginning of the period at Dec. 31, 2019 | 232,576 | 23 | (101,739) | $ 300,184 | $ 82,300 | $ (48,192) |
Balance at the beginning of the period (in units) at Dec. 31, 2019 | 19,870,436 | 13,586,375 | ||||
Changes in Partners’ Capital | ||||||
Distributions to unitholders, distribution equivalent and incentive distribution rights | (27,259) | (3,289) | $ (14,798) | $ (9,172) | ||
Issuance of units through Long-Term Incentive Plan | (3,727) | (3,356) | $ (371) | |||
Issuance of units through Long-Term Incentive Plan (in units) | 149,000 | |||||
Non-cash Management Services Agreement expenses | 5,642 | 3,484 | $ 2,158 | |||
Other comprehensive loss | (17) | (17) | ||||
Net income (loss) | 7,633 | 3,289 | 2,585 | 1,759 | ||
Balance at the end of the period at Mar. 31, 2020 | $ 214,848 | $ 6 | $ (101,611) | $ 289,758 | $ 74,887 | $ (48,192) |
Balance at the end of the period (in units) at Mar. 31, 2020 | 20,018,763 | 13,586,375 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 7,633 | $ (8,923) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 13,965 | 11,208 |
MSA Fee Waivers | 3,186 | 0 |
Amortization of debt issuance costs, debt premium and original issue discounts | 407 | 295 |
Unit-based compensation | 2,158 | 2,472 |
Fair value changes in derivatives | (5,829) | 2,216 |
Unrealized (losses) gains on foreign currency transactions, net | (35) | 92 |
Change in operating assets and liabilities: | ||
Accounts and insurance receivables | (7,604) | (6,359) |
Related-party receivables | 0 | (8,022) |
Prepaid expenses and other current and long-term assets | 113 | (72) |
Inventories | (6,935) | 3,366 |
Derivatives | (883) | 298 |
Accounts payable, accrued liabilities and other current liabilities | 9,526 | (1,229) |
Related-party payables | 5,281 | (12,330) |
Accrued interest | 9,751 | 7,514 |
Deferred revenue | (2,257) | 0 |
Operating lease liabilities | (1,021) | (893) |
Other long-term liabilities | 448 | 98 |
Net cash provided by (used in) operating activities | 27,904 | (10,269) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (25,691) | (11,279) |
Other | (3,769) | 0 |
Net cash used in investing activities | (29,460) | (11,279) |
Cash flows from financing activities: | ||
Proceeds from senior secured revolving credit facility, net | 70,000 | 46,000 |
Principal payments on other long-term debt and finance lease obligations | (903) | (553) |
Cash paid related to debt issuance costs | (985) | 0 |
Proceeds from common unit issuances, net | 0 | 100,000 |
Payments in relation to the Hamlet JV Drop-Down | (40,000) | 0 |
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder | (26,571) | (19,614) |
Payment for withholding tax associated with Long-Term Incentive Plan vesting | (3,727) | 0 |
Net cash (used in) provided by financing activities | (2,186) | 125,833 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (3,742) | 104,285 |
Cash, cash equivalents and restricted cash, beginning of period | 9,053 | 2,460 |
Cash, cash equivalents and restricted cash, end of period | 5,311 | 106,745 |
Non-cash investing and financing activities: | ||
Property, plant and equipment acquired included in liabilities | 19,435 | 11,237 |
Supplemental cash flow information: | ||
Interest paid, net of capitalized interest | $ 723 | $ 1,929 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business Enviva Partners, LP, together with its subsidiaries (“we,” “us,” “our” or the “Partnership”), supplies utility-grade wood pellets primarily to major power generators under long-term, take-or-pay off-take contracts. We procure wood fiber and process it into utility-grade wood pellets and load the finished wood pellets into railcars, trucks and barges for transportation to deep-water marine terminals, where they are received, stored and ultimately loaded onto oceangoing vessels for delivery under long-term, take-or-pay off-take contracts to our customers principally in the United Kingdom (the “U.K.”), Europe and increasingly Japan. We own and operate seven industrial-scale wood pellet production plants located in the Mid-Atlantic and Gulf Coast regions of the United States. In addition to the volumes from our plants, we also procure wood pellets from third parties and Enviva Pellets Greenwood, LLC (“Greenwood”), a consolidated subsidiary of Enviva Holdings, LP (together with its wholly owned subsidiaries Enviva Development Holdings, LLC and Enviva MLP Holdco, LLC, where applicable, our “sponsor”). Greenwood owns a wood pellet production plant in Greenwood, South Carolina (the “Greenwood plant”). Wood pellets are exported from our wholly owned deep-water marine terminal at the Port of Chesapeake, Virginia and terminal assets at the Port of Wilmington, North Carolina (the “Wilmington terminal”), and from third-party deep-water marine terminals in Mobile, Alabama, and Panama City, Florida under a short-term and a long-term contract, respectively. Basis of Presentation The unaudited financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and accruals necessary for a fair presentation have been included. All such adjustments and accruals are of a normal and recurring nature unless disclosed otherwise. All intercompany balances and transactions have been eliminated in consolidation. The results reported in the financial statements are not necessarily indicative of the results that may be reported for the entire year. We entered into an agreement with our sponsor effective as of September 30, 2019 pursuant to which the parties agreed to set off related-party receivables and payables; consequently, we intend to set off related-party receivables and payables, which are reflected net in related-party receivables or payables, in accordance with the agreement. The unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 . Enviva Wilmington Holdings, LLC On April 2, 2019, we acquired from our sponsor all of the issued and outstanding Class B Units in Enviva Wilmington Holdings, LLC (the “Hamlet JV”), a limited liability company owned by our sponsor and John Hancock Life Insurance Company (U.S.A.) and certain of its affiliates (collectively, as applicable, “John Hancock”). On the date of acquisition (the “Hamlet Drop-Down”), we began to consolidate the Hamlet JV as a variable interest entity of which we are the primary beneficiary. As managing member, we have the sole power to direct the activities that most impact the economics of the Hamlet JV. Additionally, as the Class B Units represent a controlling interest in the Hamlet JV, we account for the Hamlet JV as a consolidated subsidiary, not as a joint venture. The Hamlet JV owns a wood pellet production plant in Hamlet, North Carolina (the “Hamlet plant”) and a firm, 15-year take-or-pay off-take contract with a customer for the delivery of nearly 1.0 million metric tons per year (“MTPY”) of wood pellets, following a ramp period. The Hamlet Drop-Down was an asset acquisition of entities under common control and accounted for on the carryover basis of accounting. Accordingly, the consolidated financial statements for the period beginning April 2019 reflect the acquisition. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies During interim periods, we follow the accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 . Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in our unaudited financial statements and accompanying notes. Actual results could differ materially from those estimates. Recently Adopted Accounting Standards On January 1, 2020, we adopted Accounting Standards Update 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which changes how entities measure credit losses for most financial assets. The adoption did not have a material impact on the financial statements. Recently Issued Accounting Standards not yet Adopted Currently, there are no recently issued accounting standards not yet adopted by us that we expect to be reasonably likely to materially impact the financial position, results of operations or cash flows of the Partnership. |
Transactions Between Entities U
Transactions Between Entities Under Common Control | 3 Months Ended |
Mar. 31, 2020 | |
Transactions Between Entities Under Common Control | |
Transactions Between Entities Under Common Control | Transactions Between Entities Under Common Control The $ 165.0 million purchase price for the Hamlet Drop-Down in April 2019 consisted of (1) an initial cash payment of $ 24.7 million , net of a purchase price adjustment of $ 0.3 million , (2) the issuance of 1,681,237 unregistered common units at a value of $ 29.74 per unit, or $ 50.0 million of common units, (3) $ 50.0 million in cash, paid on June 28, 2019 and (4) a third and final cash payment of $ 40.0 million paid on January 2, 2020. We are responsible for managing the activities of the Hamlet JV, including the development, construction and operation of the Hamlet plant and are the primary beneficiary of the Hamlet JV. We included all accounts of the Hamlet JV in our consolidated results as of the date of the Hamlet Drop-Down as the Class B Units represent a controlling interest in the Hamlet JV and we are generally unrestricted in managing the assets and cash flows of the Hamlet JV; however, certain decisions, such as those relating to the issuance and redemption of equity interests in the Hamlet JV, guarantees of indebtedness and fundamental changes, including mergers and acquisitions, asset sales and liquidation and dissolution of the Hamlet JV, require the approval of the members of the Hamlet JV. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue We disaggregate our revenue into two categories: product sales and other revenue. Other revenue includes fees associated with customer requests to cancel, defer or accelerate shipments in satisfaction of the related performance obligation and third- and related-party terminal services fees. Other revenue also includes fees received for other services, including for sales and marketing, scheduling, sustainability, consultation, shipping and risk management services, where the revenue is recognized when we both have satisfied the performance obligation and have a right to the corresponding fee. These categories best reflect the nature, amount, timing and uncertainty of our revenue and cash flows. Performance Obligations As of March 31, 2020 , the aggregate amount of revenues from contracts with customers allocated to performance obligations that were unsatisfied or partially satisfied was approximately $ 8.9 billion . This amount excludes forward prices related to variable consideration including inflation and foreign currency and commodity prices. Also, this amount excludes the effects of related foreign currency derivative contracts as they do not represent contracts with customers. As of April 1, 2020, we expect to recognize approximately 7.0% of our remaining performance obligations as revenue during the remainder of 2020, approximately 12.0% in 2021 and the balance thereafter. Our off-take contracts expire at various times through 2040 and our terminal services contracts extend into 2026. Variable Consideration Variable consideration from off-take contracts arises from several pricing features outlined in our off-take contracts, pursuant to which such contract pricing may be adjusted in respect of particular shipments to reflect differences between certain contractual quality specifications of the wood pellets as measured both when the wood pellets are loaded onto ships and unloaded at the discharge port as well as certain other contractual adjustments. Variable consideration from terminal services contracts, which was none for the three months ended March 31, 2020 and not material for the three months ended March 31, 2019 , arises from price increases based on agreed inflation indices and from above-minimum throughput quantities or services. We allocate variable consideration under our off-take and terminal services contracts entirely to each performance obligation to which variable consideration relates. The estimate of variable consideration represents the amount that is not more likely than not to be reversed. For the three months ended March 31, 2020 , and 2019 we recognized $0.2 million and $0.1 million . respectively, of revenue related to performance obligations satisfied in previous periods. Contract Balances Accounts receivable related to product sales as of March 31, 2020 and December 31, 2019 were $73.9 million and $67.7 million , respectively. As of March 31, 2020 and December 31, 2019 , we had $1.9 million and $4.1 million , respectively, of deferred revenue for future performance obligations associated with off-take contracts. |
Significant Risks and Uncertain
Significant Risks and Uncertainties Including Business and Credit Concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Significant Risks and Uncertainties Including Business and Credit Concentrations | Significant Risks and Uncertainties Including Business and Credit Concentrations Our business is significantly impacted by greenhouse gas emission and renewable energy legislation and regulations in the U.K., European Union (“EU”) as well as its member states and Japan. If the U.K., the EU or its member states or Japan significantly modify such legislation or regulations, then our ability to enter into new contracts as our existing contracts expire may be materially affected. Our current product sales are primarily to industrial customers located in the U.K., Denmark and Belgium. Product sales to third-party customers that accounted for 10% or a greater share of consolidated product sales are as follows: Three Months Ended 2020 2019 Customer A 35 % 40 % Customer B 9 % 11 % Customer C 24 % 16 % Customer D 15 % 25 % |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following as of: March 31, December 31, Raw materials $ 10,176 $ 9,795 Consumable tooling 20,855 20,485 Finished goods 9,475 2,718 Total inventories $ 40,506 $ 32,998 |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following as of: March 31, December 31, Land $ 15,226 $ 15,226 Land improvements 56,779 56,637 Buildings 217,163 217,167 Machinery and equipment 596,283 588,447 Vehicles 724 635 Furniture and office equipment 6,822 6,822 Leasehold improvements 1,029 1,029 Property, plant and equipment 894,026 885,963 Less accumulated depreciation (217,909 ) (203,695 ) Property, plant and equipment, net 676,117 682,268 Construction in progress 90,745 69,512 Total property, plant and equipment, net $ 766,862 $ 751,780 Total depreciation expense was $14.0 million and $11.2 million , respectively, for the three months ended March 31, 2020 and 2019 . For the three months ended March 31, 2020 and 2019 , total interest capitalized related to construction in progress was $1.1 million and $0.1 million , respectively. Accrued amounts for property, plant and equipment and construction in progress included in accrued and other current liabilities were $11.9 million and $9.4 million at March 31, 2020 and December 31, 2019 , respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We have operating and finance leases related to real estate, machinery, equipment and other assets where we are the lessee. Leases with an initial term of 12 months or less are not recorded on the balance sheet but are recognized as lease expense on a straight-line basis over the applicable lease terms. Leases with an initial term of longer than 12 months are recorded on the balance sheet and classified as either operating or finance. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Our leases do not contain any material residual value guarantees, restrictive covenants or subleases. In addition to fixed lease payments, we have contracts that incur variable lease expense related to usage (e.g. throughput fees, maintenance and repair and machine hours), which are expensed as incurred. Our leases have remaining terms of one to 27 years , some of which include options to extend the leases for up to five years . Our leases are generally noncancelable. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We apply an incremental borrowing rate to our leases for balance sheet measurement. As most of our leases do not provide an implicit rate, we generally use the estimated rate of interest for a collateralized borrowing over a similar term of the lease payments at the lease commencement date as our incremental borrowing rate. Operating leases are included in operating lease ROU assets, accrued and other current liabilities and long-term operating lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and finance lease obligations and long-term debt and finance lease obligations on our condensed consolidated balance sheets. Changes in ROU assets and operating lease liabilities are included net in change in operating lease liabilities on the condensed consolidated statement of cash flows. Operating lease ROU assets and liabilities and finance leases were as follows: March 31, December 31, Operating leases: Operating lease right-of-use assets $ 32,270 $ 32,830 Current portion of operating lease liabilities $ 1,277 $ 1,439 Long-term operating lease liabilities 33,228 33,469 Total operating lease liabilities $ 34,505 $ 34,908 Finance leases: Property, plant and equipment, net $ 9,034 $ 7,398 Current portion of long-term finance lease obligations $ 5,579 $ 4,584 Long-term finance lease obligations 4,023 2,954 Total finance lease liabilities $ 9,602 $ 7,538 Operating and finance lease costs were as follows: Three Months Ended Lease Cost Classification 2020 2019 Operating lease cost: Fixed lease cost Cost of goods sold $ 1,267 $ 1,034 Variable lease cost Cost of goods sold — 6 Short-term lease costs Cost of goods sold 1,935 — Total operating lease costs $ 3,202 $ 1,040 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 1,432 $ 719 Variable lease cost Cost of goods sold 2 4 Interest on lease liabilities Interest expense 103 52 Total finance lease costs $ 1,537 $ 775 Total lease costs $ 4,739 $ 1,815 Operating and finance lease cash flow information was as follows: Three Months Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,021 $ 893 Operating cash flows from financing leases 103 52 Financing cash flows from financing leases 901 551 Assets obtained in exchange for lease obligations: Financing leases $ 3,068 $ 626 The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of March 31, 2020 : Years Ending December 31, Operating Finance Total Remainder of 2020 $ 3,219 $ 4,580 $ 7,799 2021 3,890 3,678 7,568 2022 3,719 750 4,469 2023 3,710 568 4,278 2024 3,581 199 3,780 Thereafter 61,529 179 61,708 Total lease payments 79,648 9,954 89,602 Less: imputed interest (45,143 ) (352 ) (45,495 ) Total present value of lease liabilities $ 34,505 $ 9,602 $ 44,107 The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of March 31, 2020 : Weighted average remaining lease term (years): Operating leases 22 Finance leases 2 Weighted average discount rate: Operating leases 8 % Finance leases 6 % |
Leases | Leases We have operating and finance leases related to real estate, machinery, equipment and other assets where we are the lessee. Leases with an initial term of 12 months or less are not recorded on the balance sheet but are recognized as lease expense on a straight-line basis over the applicable lease terms. Leases with an initial term of longer than 12 months are recorded on the balance sheet and classified as either operating or finance. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Our leases do not contain any material residual value guarantees, restrictive covenants or subleases. In addition to fixed lease payments, we have contracts that incur variable lease expense related to usage (e.g. throughput fees, maintenance and repair and machine hours), which are expensed as incurred. Our leases have remaining terms of one to 27 years , some of which include options to extend the leases for up to five years . Our leases are generally noncancelable. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. We apply an incremental borrowing rate to our leases for balance sheet measurement. As most of our leases do not provide an implicit rate, we generally use the estimated rate of interest for a collateralized borrowing over a similar term of the lease payments at the lease commencement date as our incremental borrowing rate. Operating leases are included in operating lease ROU assets, accrued and other current liabilities and long-term operating lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of long-term debt and finance lease obligations and long-term debt and finance lease obligations on our condensed consolidated balance sheets. Changes in ROU assets and operating lease liabilities are included net in change in operating lease liabilities on the condensed consolidated statement of cash flows. Operating lease ROU assets and liabilities and finance leases were as follows: March 31, December 31, Operating leases: Operating lease right-of-use assets $ 32,270 $ 32,830 Current portion of operating lease liabilities $ 1,277 $ 1,439 Long-term operating lease liabilities 33,228 33,469 Total operating lease liabilities $ 34,505 $ 34,908 Finance leases: Property, plant and equipment, net $ 9,034 $ 7,398 Current portion of long-term finance lease obligations $ 5,579 $ 4,584 Long-term finance lease obligations 4,023 2,954 Total finance lease liabilities $ 9,602 $ 7,538 Operating and finance lease costs were as follows: Three Months Ended Lease Cost Classification 2020 2019 Operating lease cost: Fixed lease cost Cost of goods sold $ 1,267 $ 1,034 Variable lease cost Cost of goods sold — 6 Short-term lease costs Cost of goods sold 1,935 — Total operating lease costs $ 3,202 $ 1,040 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 1,432 $ 719 Variable lease cost Cost of goods sold 2 4 Interest on lease liabilities Interest expense 103 52 Total finance lease costs $ 1,537 $ 775 Total lease costs $ 4,739 $ 1,815 Operating and finance lease cash flow information was as follows: Three Months Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,021 $ 893 Operating cash flows from financing leases 103 52 Financing cash flows from financing leases 901 551 Assets obtained in exchange for lease obligations: Financing leases $ 3,068 $ 626 The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of March 31, 2020 : Years Ending December 31, Operating Finance Total Remainder of 2020 $ 3,219 $ 4,580 $ 7,799 2021 3,890 3,678 7,568 2022 3,719 750 4,469 2023 3,710 568 4,278 2024 3,581 199 3,780 Thereafter 61,529 179 61,708 Total lease payments 79,648 9,954 89,602 Less: imputed interest (45,143 ) (352 ) (45,495 ) Total present value of lease liabilities $ 34,505 $ 9,602 $ 44,107 The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of March 31, 2020 : Weighted average remaining lease term (years): Operating leases 22 Finance leases 2 Weighted average discount rate: Operating leases 8 % Finance leases 6 % |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instrument Detail [Abstract] | |
Derivative Instruments | Derivative Instruments We use derivative instruments to partially offset our business exposure to foreign currency exchange and interest rate risk. We may enter into foreign currency forward and option contracts to offset some of the foreign currency exchange risk on expected future cash flows and interest rate swaps to offset some of the interest rate risk on expected future cash flows on certain borrowings. The preponderance of our off-take contracts are US Dollar-denominated. We are primarily exposed to fluctuations in foreign currency exchange rates related to off-take contracts that require future deliveries of wood pellets to be settled in British Pound Sterling (“GBP”) and Euro (“EUR”) in the minority of our contracts that are not denominated in US Dollars. Our derivative instruments expose us to credit risk to the extent that hedge counterparties may be unable to meet the terms of the applicable derivative instrument. We seek to mitigate such risks by limiting our counterparties to major financial institutions. In addition, we monitor the potential risk of loss with any one counterparty resulting from credit risk. Management does not expect material losses as a result of defaults by counterparties. We use derivative instruments to manage cash flow and do not enter into derivative instruments for speculative or trading purposes. Interest Rate Risk During the three months ended March 31, 2020, we entered into an additional pay-fixed, receive-variable interest rate swap that expires in September 2021 to hedge interest rate risk associated with our variable rate borrowings under our senior secured revolving credit facility that will not be designated and accounted for as a cash flow hedge. Derivative instruments are classified as Level 2 assets or liabilities based on inputs such as spot and forward benchmark interest rates (such as LIBOR) and foreign exchange rates. The fair value of derivative instruments not designated as hedging instruments at March 31, 2020 and December 31, 2019 was as follows: Asset (Liability) Balance Sheet Classification March 31, 2020 December 31, 2019 Interest rate swap: Accrued and other current liabilities $ (25 ) $ — Other long-term liabilities (36 ) — Foreign currency exchange contracts: Other current assets 2,014 408 Other long-term assets 5,132 1,774 Accrued and other current liabilities — (735 ) Other long-term liabilities — (1,055 ) Total derivatives not designated as hedging instruments $ 7,085 $ 392 Unrealized gains and losses related to the change in fair market value of interest rate swaps are recorded in interest expense and were insignificant during the three months ended March 31, 2020. We did not have interest rate swaps that were not designated as hedging instruments at March 31, 2019. During the three months ended March 31, 2020 and 2019, product sales included net unrealized gains of $6.8 million and net unrealized losses of $2.0 million , respectively, related to the change in fair market value of foreign currency derivatives. During the three months ended March 31, 2020 and 2019, product sales included realized gains related to derivatives settled of $0.2 million and $0.1 million , respectively. We enter into master netting arrangements designed to permit net settlement of derivative transactions among the respective counterparties. If we had settled all transactions with our respective counterparties at March 31, 2020 , we would have received a net settlement termination payment of $7.1 million , which differs insignificantly from the recorded fair value of the derivatives. We present our derivative assets and liabilities at their gross fair values. The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 Foreign exchange forward contracts in GBP £ 44,475 £ 50,575 Foreign exchange purchased option contracts in GBP £ 43,415 £ 43,415 Foreign exchange forward contracts in EUR € 4,500 € — Foreign exchange purchased option contracts in EUR € — € 1,200 Interest rate swap $ 69,354 $ 34,354 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The amounts reported in the unaudited condensed consolidated balance sheets as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, related-party payables, net, and accrued and other current liabilities approximate fair value because of the short-term nature of these instruments. Derivative instruments and long-term debt and finance lease obligations, including the current portion, are classified as Level 2 instruments. The fair value of our senior notes was determined based on observable market prices in a less active market and was categorized as Level 2 in the fair value hierarchy. The fair value of other long-term debt and finance lease obligations classified as Level 2 was determined based on the usage of market prices not quoted on active markets and other observable market data. The fair value of the long-term debt and finance lease obligations are based upon rates currently available for debt and finance lease obligations with similar terms and remaining maturities. The carrying amount of derivative instruments approximates fair value. The carrying amount and estimated fair value of long-term debt and finance lease obligations as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value 2026 Notes $ 593,762 $ 591,000 $ 593,476 $ 644,250 Other long-term debt and finance lease obligations 81,606 81,606 9,544 9,544 Total long-term debt and finance lease obligations $ 675,368 $ 672,606 $ 603,020 $ 653,794 |
Long-Term Debt and Finance Leas
Long-Term Debt and Finance Lease Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Finance Lease Obligations | Long-Term Debt and Finance Lease Obligations Long-term debt and finance lease obligations at carrying value are composed of the following: March 31, 2020 December 31, 2019 2026 Notes, net of unamortized discount, premium and debt issuance of $6.2 million as of March 31, 2020 and $6.5 million as of December 31, 2019 $ 593,762 $ 593,476 Senior secured revolving credit facility 70,000 — Other loans 2,004 2,006 Finance leases 9,602 7,538 Total long-term debt and finance lease obligations 675,368 603,020 Less current portion of long-term debt and finance lease obligations (7,583 ) (6,590 ) Long-term debt and finance lease obligations, excluding current installments $ 667,785 $ 596,430 2026 Notes As of March 31, 2020 and December 31, 2019 , we were in compliance with all covenants and restrictions associated with, and no events of default existed under, the indenture dated as of December 9, 2019 governing the 2026 Notes. The 2026 Notes are guaranteed jointly and severally on a senior unsecured basis by our existing subsidiaries (excluding Enviva Partners Finance Corp.) that guarantee certain of our indebtedness and may be guaranteed by certain future restricted subsidiaries. Senior Secured Revolving Credit Facility As of March 31, 2020 and December 31, 2019 , we were in compliance with all covenants and restrictions associated with, and no events of default existed under, our senior secured revolving credit facility. Our obligations under the senior secured revolving credit facility are guaranteed by certain of our subsidiaries and secured by liens on substantially all of our assets; however, the senior secured revolving credit facility is not guaranteed by the Hamlet JV or secured by liens on its assets. At March 31, 2020, we had borrowings of $70.0 million under our senior secured revolving credit facility. We had no borrowings under our senior secured revolving credit facility at December 31, 2019. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Related-party amounts included on the unaudited condensed consolidated statements of operations were as follows: Three Months Ended 2020 2019 Other revenue $ 606 $ 592 Cost of goods sold 33,617 19,998 General and administrative expenses 7,689 6,296 Management Services Agreements Enviva Partners, LP and the Hamlet JV are parties to management services agreements (together, the “MSAs”) with Enviva Management Company, LLC , a Delaware limited liability company and wholly owned subsidiary of our sponsor (together with its affiliates that provide services to us, as applicable, “Enviva Management”). Enviva Management provides us with operations, general administrative, management and other services. We reimburse Enviva Management for all direct or indirect internal or third-party expenses it incurs in connection with the provision of such services. The MSAs include rent-related amounts for noncancelable operating leases for office space in Maryland and North Carolina held by our sponsor. Under the Hamlet JV’s management services agreement (the “Hamlet JV MSA”), the Hamlet JV pays an annual management fee to Enviva Management and to the extent allocated costs exceed the annual management fee, the additional costs are recorded with an increase to partners’ capital. In connection with the Hamlet Drop-Down, Enviva Management waived the Hamlet JV’s obligation to pay approximately $ 2.7 million of management fees payable to Enviva Management from the date thereof until July 1, 2020 (the “Hamlet JV MSA Fee Waiver”). Related-party amounts included on the unaudited condensed consolidated balance sheets and the unaudited condensed consolidated statements of operations under our MSAs were as follows: March 31, 2020 December 31, 2019 Finished goods inventory $ 1,252 $ 419 Related party payables 15,227 18,703 Three Months ended March 31, 2020 2019 Cost of goods sold $ 13,260 $ 13,554 Related-party management services agreement fee 7,689 6,296 During the three months ended March 31, 2020 , $0.7 million of fees expensed under the Hamlet JV MSA were waived pursuant to the Hamlet JV MSA Fee Waiver and recorded as an increase to partner’s capital. There were no fees expensed under the Hamlet JV MSA for the three months ended March 31, 2019 . Hamlet Drop-Down Agreements On the date of the Hamlet Drop-Down: • We entered into an agreement with our sponsor, pursuant to which (1) our sponsor agreed to guarantee certain cash flows from the Hamlet plant until June 30, 2020, (2) our sponsor agreed to reimburse us for construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant, subject to certain exceptions, (3) we agreed to pay to our sponsor quarterly incentive payments for any wood pellets produced by the Hamlet plant in excess of forecast production levels through June 30, 2020 and (4) our sponsor agreed to retain liability for certain claims payable, if any, by the Hamlet JV (the “Make-Whole Agreement”). • We entered into an agreement with Enviva Management to waive our obligation to pay an aggregate of approximately $ 13.0 million in fees payable under our management services agreement with Enviva Management (the “EVA MSA”) with respect to the period from the date of the Hamlet Drop-Down through the second quarter of 2020 (the “First EVA MSA Fee Waiver”). • The Hamlet JV entered into an interim services agreement (the “ISA”) with Enviva Hamlet Operator, LLC, a wholly owned subsidiary of our sponsor (“Hamlet Operator”), pursuant to which Hamlet Operator, as an independent contractor, agreed to manage, operate, maintain and repair the Hamlet plant and provide other services to the Hamlet JV for the period from July 1, 2019 through June 30, 2020 in exchange for a fixed fee per metric ton (“MT”) of wood pellets produced by the Hamlet plant during such period and delivered at place to the Wilmington terminal. Under and during the term of the ISA, Hamlet Operator agreed to (1) pay all operating and maintenance expenses at the Hamlet plant, (2) cover all reimbursable general and administrative expenses associated with the Hamlet plant and (3) pay other costs and expenses incurred by the Hamlet plant to produce and sell the wood pellets delivered to the Wilmington terminal from the Hamlet plant. Our sponsor guarantees all obligations of Hamlet Operator under the ISA. As of March 31, 2020 , $ 2.5 million was recorded as an increase to partners’ capital, $ 10.6 million was recorded in cost of goods sold and $ 2.2 million in finished goods inventory pursuant to the agreements we entered into on the date of the Hamlet Drop-Down. The increases to partners’ capital consist of expenses waived under the First EVA MSA Fee Waiver. The net reduction in cost of goods sold comprises our receipt of a cost of cover deficiency fee from our sponsor pursuant to the Make-Whole Agreement as a result of Hamlet Operator’s failure to meet specified production levels, offset by the agreed-upon price due to Hamlet Operator for the wood pellets produced by the Hamlet plant that we have sold. Greenwood Contract We are a party to a contract with Greenwood to purchase wood pellets produced by the Greenwood plant through March 2022 (the “Greenwood contract”) and had a take-or-pay obligation with respect to 550,000 MTPY of wood pellets from July 2019 through March 2022, subject to Greenwood’s option to increase or decrease the volume by 10% each contract year. Pursuant to amendments to the Greenwood Contract, our take-or-pay obligation with respect to 550,000 MTPY of wood pellets was deferred to 2021. During the three months ended March 31, 2020 and 2019 , we purchased $9.9 million and $10.5 million , respectively, of wood pellets from Greenwood and recorded a cost of cover deficiency fee of approximately $0.4 million and $2.9 million , respectively, from Greenwood as Greenwood was unable to satisfy certain commitments. As of March 31, 2020 and 2019, the net expense related to the Greenwood contract of $9.5 million and $7.6 million , respectively, included $8.4 million and $7.5 million , respectively, in cost of goods sold and $1.1 million and $ 0.1 million , respectively, in finished goods inventory. Holdings TSA We have a long-term terminal services agreement with our sponsor (the “Holdings TSA”). Pursuant to the Holdings TSA, our sponsor agreed to deliver a minimum of 125,000 MT of wood pellets per quarter for receipt, storage, handling and loading services by the Wilmington terminal and pay a fixed fee on a per-ton basis for such terminal services. The Holdings TSA remains in effect until September 1, 2026. The Holdings TSA was amended and assigned to Greenwood and deficiency payments are due to Wilmington if quarterly minimum throughput requirements are not met. During each of the three months ended March 31, 2020 and 2019 , we recorded $0.6 million of deficiency fees from Greenwood, which are included in other revenue. Enviva FiberCo, LLC We purchase raw materials from Enviva FiberCo, LLC (“FiberCo”), a wholly owned subsidiary of our sponsor. During the three months ended March 31, 2020, included in cost of goods sold is $ 1.4 million of raw materials purchased. During the three months ended March 31, 2019 , included in cost of goods sold are cost of cover deficiency fees net of raw materials purchases of $1.0 million . As of March 31, 2020 , $ 0.1 million is included in related-party payables related to raw material purchased from FiberCo. |
Partners' Capital
Partners' Capital | 3 Months Ended |
Mar. 31, 2020 | |
Partners' Capital Notes [Abstract] | |
Partners' Capital | Partners’ Capital Allocations of Net Income The Partnership’s partnership agreement contains provisions for the allocation of net income and loss to the unitholders of the Partnership and Enviva Partners GP, LLC (“General Partner”), a wholly owned subsidiary of our sponsor. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners of the Partnership in accordance with their respective percentage ownership interest. Such allocations are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions, which are allocated 100% to the General Partner. Incentive Distribution Rights Incentive distribution rights (“IDRs”) represent the right to receive increasing percentages (from 15.0% to 50.0% ) of quarterly distributions from operating surplus after distributions in amounts exceeding specified target distribution levels have been achieved by the Partnership. Our General Partner currently holds the IDRs, but may transfer them at any time. Cash Distributions to Unitholders Distributions that have been paid or declared related to the reporting period are considered in the determination of earnings per unit. The following table details the cash distribution paid or declared (in millions, except per-unit amounts): Quarter Ended Declaration Date Record Date Payment Date Distribution Per Unit Total Cash Distribution Total Payment to General Partner for Incentive Distribution Rights March 31, 2019 May 2, 2019 May 20, 2019 May 29, 2019 $ 0.6450 $ 21.6 $ 2.3 June 30, 2019 July 31, 2019 August 15, 2019 August 29, 2019 $ 0.6600 $ 22.1 $ 2.8 September 30, 2019 October 30, 2019 November 15, 2019 November 29, 2019 $ 0.6700 $ 22.4 $ 3.1 December 31, 2019 January 29, 2020 February 14, 2020 February 28, 2020 $ 0.6750 $ 22.7 $ 3.3 March 31, 2020 April 29, 2020 May 15, 2020 May 29, 2020 $ 0.6800 $ 22.9 $ 3.5 For purposes of calculating our earnings per unit under the two-class method, common units are treated as participating preferred units. IDRs are treated as participating securities. Distributions made in future periods based on the current period calculation of cash available for distribution are allocated to each class of equity that will receive the distribution. Any unpaid cumulative distributions are allocated to the appropriate class of equity. We determine the amount of cash available for distribution for each quarter in accordance with our partnership agreement. The amount to be distributed to unitholders and IDR holders is based on the distribution waterfall set forth in our partnership agreement. Net earnings for the quarter are allocated to each class of partnership interest based on the distributions to be made. |
Equity-Based Awards
Equity-Based Awards | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Awards | Equity-Based Awards The following table summarizes information regarding phantom unit awards (the “Affiliate Grants”) under the LTIP to employees of Enviva Management and its affiliates who provide services to the Partnership: Time-Based Phantom Units Performance-Based Phantom Units Total Affiliate Grant Phantom Units Units Weighted-Average Grant Date Fair Value (per unit)(1) Units Weighted-Average Grant Date Fair Value (per unit)(1) Units Weighted-Average Grant Date Fair Value (per unit)(1) Nonvested December 31, 2019 874,286 $ 28.90 435,270 $ 28.84 1,309,556 $ 28.88 Granted 523,012 $ 37.99 378,488 $ 37.99 901,500 $ 37.99 Forfeitures (22,324 ) $ 30.49 (37,938 ) $ 25.78 (60,262 ) $ 27.52 Vested (179,277 ) $ 25.25 (53,645 ) $ 25.39 (232,922 ) $ 25.28 Nonvested March 31, 2020 1,195,697 $ 33.39 722,175 $ 34.06 1,917,872 $ 33.64 ______________________________________________________________ (1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. The unrecognized estimated compensation cost relating to outstanding Affiliate Grants at March 31, 2020 was $ 23.2 million which will be recognized over the remaining vesting period. The following table summarizes information regarding phantom unit awards to certain non-employee directors of the General Partner (the “Director Grants”) under the LTIP: Time-Based Phantom Units Units Weighted-Average Grant Date Fair Value (per unit)(1) Nonvested December 31, 2019 13,264 $ 30.16 Granted 12,112 $ 37.98 Vested (13,264 ) $ 30.16 Nonvested March 31, 2020 12,112 $ 37.98 In February 2020, Director Grants valued at $0.5 million were granted and vest on the first anniversary of the grant date. In February 2019, the Director Grants that were nonvested at December 31, 2019 vested, and common units were issued in respect of such vested Director Grants. During the three months ended March 31, 2020 we recognized $ 0.1 million of unit based compensation expense with respect to the Director Grants. The unrecognized estimated compensation cost relating to outstanding Director Grants at March 31, 2020 was $0.4 million , which will be recognized over the remaining vesting period. Distribution Equivalent Rights Distribution equivalent rights (“DERs”) associated with Affiliate Grants and Director Grants subject to time-based vesting entitle the recipients to receive payments in respect thereof in a per-unit amount that is equal to any distributions made by us to the holders of common units within 60 days following the record date for such distributions. The DERs associated with the Affiliate Grants subject to performance-based vesting will remain outstanding and unpaid from the grant date until the earlier of the settlement or forfeiture of the related performance-based phantom units. DER distributions paid related to time-based Affiliate Grants were $0.6 million and $0.9 million , respectively, for the three months ended March 31, 2020 and 2019 . At March 31, 2020 and December 31, 2019 , $0.8 million and $0.6 million , respectively, of DER distributions were included in related-party payables. DER distributions unpaid related to the performance-based Affiliate Grants were as follows as of: March 31, 2020 December 31, 2019 Related-party payables $ 394 $ — Accrued liabilities 759 397 Other long-term liabilities 900 1,193 Total unpaid DERs $ 2,053 $ 1,590 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our operations are organized as limited partnerships and entities that are disregarded entities for federal and state income tax purposes. As a result, we are not subject to U.S. federal and most state income taxes. The unitholders of the Partnership are liable for these income taxes on their share of our taxable income. Some states impose franchise and capital taxes on the Partnership. Such taxes are not material to the condensed consolidated financial statements and have been included in other income (expense) as incurred. As of March 31, 2020 , the only periods subject to examination for federal and state income tax returns are 2016 through 2018. We believe our income tax filing positions, including our status as a pass-through entity, would be sustained on audit and do not anticipate any adjustments that would result in a material change to our unaudited condensed consolidated balance sheet. Therefore, no reserves for uncertain tax positions or interest and penalties have been recorded. For the three months ended March 31, 2020 and 2019 , no provision for federal or state income taxes has been recorded in the condensed consolidated financial statements. |
Net Income (Loss) per Limited P
Net Income (Loss) per Limited Partner Unit | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Limited Partner Unit | Net Income (Loss) per Limited Partner Unit Net income (loss) per unit applicable to limited partners is computed by dividing limited partners’ interest in net income (loss), after deducting any incentive distributions, by the weighted-average number of units outstanding. Our net income (loss) is allocated to the limited partners in accordance with their respective ownership percentages, after giving effect to priority income allocations for incentive distributions, if any, to the holder of the IDRs, which are declared and paid following the close of each quarter. Earnings in excess of distributions are allocated to the limited partners based on their respective ownership interests. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income (loss) allocations used in the calculation of earnings per unit. In addition to the common units, we have identified the IDRs and phantom units as participating securities and apply the two-class method when calculating the net income (loss) per unit applicable to limited partners, which is based on the weighted-average number of units outstanding during the period. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantom units on our common units. The following computation of net income (loss) available per limited partner unit is as follows for the three months ended March 31, 2020 and 2019 : Three Months Ended Common Units General Partner Weighted-average units outstanding—basic 33,551 — Effect of nonvested phantom units 1,885 — Weighted-average units outstanding—diluted 35,436 — Three Months Ended March 31, 2020 Common Units General Partner Total Distributions declared $ 22,856 $ 3,457 $ 26,313 Earnings less than distributions (19,503 ) — (19,503 ) Net income available to partners $ 3,353 $ 3,457 $ 6,810 Weighted-average units outstanding—basic 33,551 Weighted-average units outstanding—diluted 35,436 Net income per limited partner unit—basic $ 0.10 Net income per limited partner unit—diluted $ 0.09 Three Months Ended Common Units General Partner Weighted-average units outstanding—basic 26,759 — Effect of nonvested phantom units — — Weighted-average units outstanding—diluted 26,759 — Three Months Ended March 31, 2019 Common Units General Partner Total Distributions declared $ 21,580 $ 2,270 $ 23,850 Earnings less than distributions (32,773 ) — (32,773 ) Net (loss) income available to partners $ (11,193 ) $ 2,270 $ (8,923 ) Weighted-average units outstanding—basic and diluted 26,759 Net loss per limited partner unit—basic and diluted $ (0.42 ) |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the amounts reported in our unaudited financial statements and accompanying notes. Actual results could differ materially from those estimates. |
Accounting Standards Adopted and Recently Issued not yet Adopted | Recently Issued Accounting Standards not yet Adopted Currently, there are no recently issued accounting standards not yet adopted by us that we expect to be reasonably likely to materially impact the financial position, results of operations or cash flows of the Partnership. |
Revenue Revenue (Policies)
Revenue Revenue (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue [Abstract] | |
Revenue | Variable consideration from off-take contracts arises from several pricing features outlined in our off-take contracts, pursuant to which such contract pricing may be adjusted in respect of particular shipments to reflect differences between certain contractual quality specifications of the wood pellets as measured both when the wood pellets are loaded onto ships and unloaded at the discharge port as well as certain other contractual adjustments. We disaggregate our revenue into two categories: product sales and other revenue. Other revenue includes fees associated with customer requests to cancel, defer or accelerate shipments in satisfaction of the related performance obligation and third- and related-party terminal services fees. Other revenue also includes fees received for other services, including for sales and marketing, scheduling, sustainability, consultation, shipping and risk management services, where the revenue is recognized when we both have satisfied the performance obligation and have a right to the corresponding fee. These categories best reflect the nature, amount, timing and uncertainty of our revenue and cash flows. |
Leases (Policies)
Leases (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lessee, Leases | We have operating and finance leases related to real estate, machinery, equipment and other assets where we are the lessee. Leases with an initial term of 12 months or less are not recorded on the balance sheet but are recognized as lease expense on a straight-line basis over the applicable lease terms. Leases with an initial term of longer than 12 months are recorded on the balance sheet and classified as either operating or finance. We apply an incremental borrowing rate to our leases for balance sheet measurement. As most of our leases do not provide an implicit rate, we generally use the estimated rate of interest for a collateralized borrowing over a similar term of the lease payments at the lease commencement date as our incremental borrowing rate. |
Derivative Instruments (Policie
Derivative Instruments (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instrument Detail [Abstract] | |
Derivative Instruments | We use derivative instruments to partially offset our business exposure to foreign currency exchange and interest rate risk. We may enter into foreign currency forward and option contracts to offset some of the foreign currency exchange risk on expected future cash flows and interest rate swaps to offset some of the interest rate risk on expected future cash flows on certain borrowings. |
Significant Risks and Uncerta_2
Significant Risks and Uncertainties Including Business and Credit Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of revenue from major customers | Product sales to third-party customers that accounted for 10% or a greater share of consolidated product sales are as follows: Three Months Ended 2020 2019 Customer A 35 % 40 % Customer B 9 % 11 % Customer C 24 % 16 % Customer D 15 % 25 % |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following as of: March 31, December 31, Raw materials $ 10,176 $ 9,795 Consumable tooling 20,855 20,485 Finished goods 9,475 2,718 Total inventories $ 40,506 $ 32,998 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant and equipment consisted of the following as of: March 31, December 31, Land $ 15,226 $ 15,226 Land improvements 56,779 56,637 Buildings 217,163 217,167 Machinery and equipment 596,283 588,447 Vehicles 724 635 Furniture and office equipment 6,822 6,822 Leasehold improvements 1,029 1,029 Property, plant and equipment 894,026 885,963 Less accumulated depreciation (217,909 ) (203,695 ) Property, plant and equipment, net 676,117 682,268 Construction in progress 90,745 69,512 Total property, plant and equipment, net $ 766,862 $ 751,780 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Operating lease ROU assets and liabilities and finance leases | Operating lease ROU assets and liabilities and finance leases were as follows: March 31, December 31, Operating leases: Operating lease right-of-use assets $ 32,270 $ 32,830 Current portion of operating lease liabilities $ 1,277 $ 1,439 Long-term operating lease liabilities 33,228 33,469 Total operating lease liabilities $ 34,505 $ 34,908 Finance leases: Property, plant and equipment, net $ 9,034 $ 7,398 Current portion of long-term finance lease obligations $ 5,579 $ 4,584 Long-term finance lease obligations 4,023 2,954 Total finance lease liabilities $ 9,602 $ 7,538 |
Operating and finance lease cash flow information | Operating and finance lease costs were as follows: Three Months Ended Lease Cost Classification 2020 2019 Operating lease cost: Fixed lease cost Cost of goods sold $ 1,267 $ 1,034 Variable lease cost Cost of goods sold — 6 Short-term lease costs Cost of goods sold 1,935 — Total operating lease costs $ 3,202 $ 1,040 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 1,432 $ 719 Variable lease cost Cost of goods sold 2 4 Interest on lease liabilities Interest expense 103 52 Total finance lease costs $ 1,537 $ 775 Total lease costs $ 4,739 $ 1,815 Operating and finance lease cash flow information was as follows: Three Months Ended 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,021 $ 893 Operating cash flows from financing leases 103 52 Financing cash flows from financing leases 901 551 Assets obtained in exchange for lease obligations: Financing leases $ 3,068 $ 626 The weighted-average remaining lease terms and discount rates for our operating and finance leases were weighted using the undiscounted future minimum lease payments and are as follows as of March 31, 2020 : Weighted average remaining lease term (years): Operating leases 22 Finance leases 2 Weighted average discount rate: Operating leases 8 % Finance leases 6 % |
Aggregate maturities of operating lease liabilities | The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of March 31, 2020 : Years Ending December 31, Operating Finance Total Remainder of 2020 $ 3,219 $ 4,580 $ 7,799 2021 3,890 3,678 7,568 2022 3,719 750 4,469 2023 3,710 568 4,278 2024 3,581 199 3,780 Thereafter 61,529 179 61,708 Total lease payments 79,648 9,954 89,602 Less: imputed interest (45,143 ) (352 ) (45,495 ) Total present value of lease liabilities $ 34,505 $ 9,602 $ 44,107 |
Aggregate maturities of finance lease liabilities | The future minimum lease payments and the aggregate maturities of operating and finance lease liabilities are as follows as of March 31, 2020 : Years Ending December 31, Operating Finance Total Remainder of 2020 $ 3,219 $ 4,580 $ 7,799 2021 3,890 3,678 7,568 2022 3,719 750 4,469 2023 3,710 568 4,278 2024 3,581 199 3,780 Thereafter 61,529 179 61,708 Total lease payments 79,648 9,954 89,602 Less: imputed interest (45,143 ) (352 ) (45,495 ) Total present value of lease liabilities $ 34,505 $ 9,602 $ 44,107 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instrument Detail [Abstract] | |
Schedule of fair values of the derivative financial instruments included in the consolidated balance sheets | The fair value of derivative instruments not designated as hedging instruments at March 31, 2020 and December 31, 2019 was as follows: Asset (Liability) Balance Sheet Classification March 31, 2020 December 31, 2019 Interest rate swap: Accrued and other current liabilities $ (25 ) $ — Other long-term liabilities (36 ) — Foreign currency exchange contracts: Other current assets 2,014 408 Other long-term assets 5,132 1,774 Accrued and other current liabilities — (735 ) Other long-term liabilities — (1,055 ) Total derivatives not designated as hedging instruments $ 7,085 $ 392 |
Schedule of notional amounts of outstanding derivative instruments designated as cash flow hedges associated with outstanding or unsettled derivative instruments | The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivative instruments as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 Foreign exchange forward contracts in GBP £ 44,475 £ 50,575 Foreign exchange purchased option contracts in GBP £ 43,415 £ 43,415 Foreign exchange forward contracts in EUR € 4,500 € — Foreign exchange purchased option contracts in EUR € — € 1,200 Interest rate swap $ 69,354 $ 34,354 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying amount and estimated fair value of long-term debt and capital lease obligations | The carrying amount and estimated fair value of long-term debt and finance lease obligations as of March 31, 2020 and December 31, 2019 were as follows: March 31, 2020 December 31, 2019 Carrying Amount Fair Value Carrying Amount Fair Value 2026 Notes $ 593,762 $ 591,000 $ 593,476 $ 644,250 Other long-term debt and finance lease obligations 81,606 81,606 9,544 9,544 Total long-term debt and finance lease obligations $ 675,368 $ 672,606 $ 603,020 $ 653,794 |
Long-Term Debt and Finance Le_2
Long-Term Debt and Finance Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt and finance lease obligations | Long-term debt and finance lease obligations at carrying value are composed of the following: March 31, 2020 December 31, 2019 2026 Notes, net of unamortized discount, premium and debt issuance of $6.2 million as of March 31, 2020 and $6.5 million as of December 31, 2019 $ 593,762 $ 593,476 Senior secured revolving credit facility 70,000 — Other loans 2,004 2,006 Finance leases 9,602 7,538 Total long-term debt and finance lease obligations 675,368 603,020 Less current portion of long-term debt and finance lease obligations (7,583 ) (6,590 ) Long-term debt and finance lease obligations, excluding current installments $ 667,785 $ 596,430 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party amounts | Related-party amounts included on the unaudited condensed consolidated statements of operations were as follows: Three Months Ended 2020 2019 Other revenue $ 606 $ 592 Cost of goods sold 33,617 19,998 General and administrative expenses 7,689 6,296 |
Related-party balance sheet location under management services agreements | Related-party amounts included on the unaudited condensed consolidated balance sheets and the unaudited condensed consolidated statements of operations under our MSAs were as follows: March 31, 2020 December 31, 2019 Finished goods inventory $ 1,252 $ 419 Related party payables 15,227 18,703 |
Related-party income statement location under management services agreements | Three Months ended March 31, 2020 2019 Cost of goods sold $ 13,260 $ 13,554 Related-party management services agreement fee 7,689 6,296 |
Equity-Based Awards (Tables)
Equity-Based Awards (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Affiliate Grants | |
Equity-Based Awards | |
Schedule of phantom unit awards | The following table summarizes information regarding phantom unit awards (the “Affiliate Grants”) under the LTIP to employees of Enviva Management and its affiliates who provide services to the Partnership: Time-Based Phantom Units Performance-Based Phantom Units Total Affiliate Grant Phantom Units Units Weighted-Average Grant Date Fair Value (per unit)(1) Units Weighted-Average Grant Date Fair Value (per unit)(1) Units Weighted-Average Grant Date Fair Value (per unit)(1) Nonvested December 31, 2019 874,286 $ 28.90 435,270 $ 28.84 1,309,556 $ 28.88 Granted 523,012 $ 37.99 378,488 $ 37.99 901,500 $ 37.99 Forfeitures (22,324 ) $ 30.49 (37,938 ) $ 25.78 (60,262 ) $ 27.52 Vested (179,277 ) $ 25.25 (53,645 ) $ 25.39 (232,922 ) $ 25.28 Nonvested March 31, 2020 1,195,697 $ 33.39 722,175 $ 34.06 1,917,872 $ 33.64 ______________________________________________________________ (1) Determined by dividing the aggregate grant date fair value of awards by the number of awards issued. |
Director Grants | |
Equity-Based Awards | |
Schedule of phantom unit awards | The following table summarizes information regarding phantom unit awards to certain non-employee directors of the General Partner (the “Director Grants”) under the LTIP: Time-Based Phantom Units Units Weighted-Average Grant Date Fair Value (per unit)(1) Nonvested December 31, 2019 13,264 $ 30.16 Granted 12,112 $ 37.98 Vested (13,264 ) $ 30.16 Nonvested March 31, 2020 12,112 $ 37.98 |
Performance Based-Affiliate Grants | |
Equity-Based Awards | |
Schedule of phantom unit awards | DER distributions unpaid related to the performance-based Affiliate Grants were as follows as of: March 31, 2020 December 31, 2019 Related-party payables $ 394 $ — Accrued liabilities 759 397 Other long-term liabilities 900 1,193 Total unpaid DERs $ 2,053 $ 1,590 |
Net Income (Loss) per Limited_2
Net Income (Loss) per Limited Partner Unit (Tables) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Schedule of weighted average common units outstanding | Three Months Ended Common Units General Partner Weighted-average units outstanding—basic 33,551 — Effect of nonvested phantom units 1,885 — Weighted-average units outstanding—diluted 35,436 — | Three Months Ended Common Units General Partner Weighted-average units outstanding—basic 26,759 — Effect of nonvested phantom units — — Weighted-average units outstanding—diluted 26,759 — |
Schedule of basic earnings (loss) per common, subordinated and general partner units | Three Months Ended March 31, 2020 Common Units General Partner Total Distributions declared $ 22,856 $ 3,457 $ 26,313 Earnings less than distributions (19,503 ) — (19,503 ) Net income available to partners $ 3,353 $ 3,457 $ 6,810 Weighted-average units outstanding—basic 33,551 Weighted-average units outstanding—diluted 35,436 Net income per limited partner unit—basic $ 0.10 Net income per limited partner unit—diluted $ 0.09 | Three Months Ended March 31, 2019 Common Units General Partner Total Distributions declared $ 21,580 $ 2,270 $ 23,850 Earnings less than distributions (32,773 ) — (32,773 ) Net (loss) income available to partners $ (11,193 ) $ 2,270 $ (8,923 ) Weighted-average units outstanding—basic and diluted 26,759 Net loss per limited partner unit—basic and diluted $ (0.42 ) |
Description of Business and B_2
Description of Business and Basis of Presentation (Details) | 1 Months Ended | |
Apr. 30, 2019T | Mar. 31, 2020plant | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of industrial-scale production wood pellet production plants in operation | plant | 7 | |
Hamlet JV | Hamlet Transaction | ||
Business Acquisition [Line Items] | ||
Take-or-pay off-take contract term | 15 years | |
Take-or-pay off-take contract volume (MTPY) | T | 1,000,000 |
Transactions Between Entities_2
Transactions Between Entities Under Common Control - Narrative (Details) - Hamlet Drop-Down - USD ($) $ / shares in Units, $ in Millions | Jan. 02, 2020 | Jun. 28, 2019 | Apr. 02, 2019 |
Transactions Between Entities Under Common Control [Line Items] | |||
Total consideration | $ 165 | ||
Cash payment | $ 40 | $ 50 | 24.7 |
Net purchase price adjustment | $ 0.3 | ||
Issuance of common units (in units) | 1,681,237 | ||
Issuance of common units (usd per unit) | $ 29.74 | ||
Common unit issuance | $ 50 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) $ in Millions | Mar. 31, 2020USD ($) |
Performance Obligations | |
Remaining performance obligations | $ 8,900 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Performance Obligations | |
Expected remaining performance obligation | 9 months |
Remaining performance obligations, percentage | 7.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Performance Obligations | |
Expected remaining performance obligation | 1 year |
Remaining performance obligations, percentage | 12.00% |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue recognized related to performance obligations satisfied in previous periods | $ 0.2 | $ 0.1 | |
Accounts receivable primarily related to product sales | 73.9 | $ 67.7 | |
Deferred revenue | $ 1.9 | $ 4.1 |
Significant Risks and Uncerta_3
Significant Risks and Uncertainties Including Business and Credit Concentrations (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Customer A | ||
Concentration Risk | ||
Concentration risk (as a percent) | 35.00% | 40.00% |
Customer B | ||
Concentration Risk | ||
Concentration risk (as a percent) | 9.00% | 11.00% |
Customer C | ||
Concentration Risk | ||
Concentration risk (as a percent) | 24.00% | 16.00% |
Customer D | ||
Concentration Risk | ||
Concentration risk (as a percent) | 15.00% | 25.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 10,176 | $ 9,795 |
Consumable tooling | 20,855 | 20,485 |
Finished goods | 9,475 | 2,718 |
Total inventories | $ 40,506 | $ 32,998 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | $ 894,026 | $ 885,963 | |
Less accumulated depreciation | (217,909) | (203,695) | |
Property, plant and equipment excluding construction in progress | 676,117 | 682,268 | |
Construction in progress | 90,745 | 69,512 | |
Property, plant and equipment, net | 766,862 | 751,780 | |
Total depreciation expense | 14,000 | $ 11,200 | |
Interest capitalized related to construction in progress | 1,100 | $ 100 | |
Accrued and other current liabilities | 50,370 | 59,066 | |
Land | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 15,226 | 15,226 | |
Land improvements | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 56,779 | 56,637 | |
Buildings | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 217,163 | 217,167 | |
Machinery and equipment | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 596,283 | 588,447 | |
Vehicles | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 724 | 635 | |
Furniture and office equipment | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 6,822 | 6,822 | |
Leasehold improvements | |||
Components of Property, plant and equipment | |||
Property, plant and equipment, gross | 1,029 | 1,029 | |
Property Plant and equipment and construction in progress | |||
Components of Property, plant and equipment | |||
Accrued and other current liabilities | $ 11,900 | $ 9,400 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Lessee, Lease, Description [Line Items] | |
Option to extend the lease terms | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 27 years |
Leases - Operating Lease ROU As
Leases - Operating Lease ROU Assets and Liabilities and Finance Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating leases: | ||
Operating lease right-of-use assets, net | $ 32,270 | $ 32,830 |
Current portion of operating lease liabilities | 1,277 | 1,439 |
Long-term operating lease liabilities | 33,228 | 33,469 |
Total operating lease liabilities | 34,505 | 34,908 |
Finance leases: | ||
Property plant and equipment, net | 9,034 | 7,398 |
Current portion of long-term finance lease obligations | 5,579 | 4,584 |
Long-term finance lease obligations | 4,023 | 2,954 |
Total finance lease liabilities | $ 9,602 | $ 7,538 |
Leases - Operating and Finance
Leases - Operating and Finance Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating lease cost: | ||
Fixed lease cost | $ 1,267 | $ 1,034 |
Variable lease cost | 0 | 6 |
Short-term lease costs | 1,935 | 0 |
Total operating lease costs | 3,202 | 1,040 |
Finance lease cost: | ||
Amortization of leased assets | 1,432 | 719 |
Variable lease cost | 2 | 4 |
Interest on lease liabilities | 103 | 52 |
Total finance lease costs | 1,537 | 775 |
Total lease costs | $ 4,739 | $ 1,815 |
Leases - Operating and Financ_2
Leases - Operating and Finance Lease Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 1,021 | $ 893 |
Operating cash flows from financing leases | 103 | 52 |
Financing cash flows from financing leases | 901 | 551 |
Assets obtained in exchange for lease obligations: | ||
Financing leases | $ 3,068 | $ 626 |
Leases - Aggregate Maturities o
Leases - Aggregate Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Remainder of 2020 | $ 3,219 | |
2021 | 3,890 | |
2022 | 3,719 | |
2023 | 3,710 | |
2024 | 3,581 | |
Thereafter | 61,529 | |
Total lease payments | 79,648 | |
Less: imputed interest | (45,143) | |
Total present value of lease liabilities | 34,505 | $ 34,908 |
Finance Leases | ||
Remainder of 2020 | 4,580 | |
2021 | 3,678 | |
2022 | 750 | |
2023 | 568 | |
2024 | 199 | |
Thereafter | 179 | |
Total lease payments | 9,954 | |
Less: imputed interest | (352) | |
Total present value of lease liabilities | 9,602 | $ 7,538 |
Total | ||
Remainder of 2020 | 7,799 | |
2021 | 7,568 | |
2022 | 4,469 | |
2023 | 4,278 | |
2024 | 3,780 | |
Thereafter | 61,708 | |
Total lease payments | 89,602 | |
Less: imputed interest | (45,495) | |
Total present value of lease liabilities | $ 44,107 |
Leases - Weighted-average Remai
Leases - Weighted-average Remaining Operating and Finance Lease Terms and Discount Rates (Details) | Mar. 31, 2020 |
Weighted average remaining lease term (years): | |
Operating leases | 22 years |
Finance leases | 2 years |
Weighted average discount rate: | |
Operating leases | 8.00% |
Finance leases | 6.00% |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivatives, Fair Value [Line Items] | ||
Unrealized net gains (loss) on derivative instruments | $ 883 | $ (298) |
Net derivative settlement termination payment amount | 7,100 | |
Product sales | ||
Derivatives, Fair Value [Line Items] | ||
Unrealized net gains (loss) on derivative instruments | 6,800 | (2,000) |
Realized gains on settled derivatives | $ 200 | $ 100 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Values (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair value of cash flow hedges | ||
Total derivatives not designated as hedging instruments | $ 7,085 | $ 392 |
Other current assets | Foreign currency exchange contract | ||
Fair value of cash flow hedges | ||
Total asset derivative | 2,014 | 408 |
Other long-term assets | Foreign currency exchange contract | ||
Fair value of cash flow hedges | ||
Total asset derivative | 5,132 | 1,774 |
Accrued and other current liabilities | Interest rate swap | ||
Fair value of cash flow hedges | ||
Total asset derivative | (25) | 0 |
Accrued and other current liabilities | Foreign currency exchange contract | ||
Fair value of cash flow hedges | ||
Total liability derivative | 0 | (735) |
Other long-term liabilities | Interest rate swap | ||
Fair value of cash flow hedges | ||
Total liability derivative | (36) | 0 |
Other long-term liabilities | Foreign currency exchange contract | ||
Fair value of cash flow hedges | ||
Total liability derivative | $ 0 | $ (1,055) |
Derivative Instruments - Notion
Derivative Instruments - Notional Amounts (Details) € in Thousands, £ in Thousands, $ in Thousands | Mar. 31, 2020USD ($) | Mar. 31, 2020GBP (£) | Mar. 31, 2020EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2019GBP (£) | Dec. 31, 2019EUR (€) |
Foreign currency exchange forward contracts | ||||||
Notional amounts of outstanding derivatives instruments designated as cash flow hedges | ||||||
Notional amount | £ 44,475 | € 4,500 | £ 50,575 | € 0 | ||
Foreign currency purchased option contracts | ||||||
Notional amounts of outstanding derivatives instruments designated as cash flow hedges | ||||||
Notional amount | £ 43,415 | € 0 | £ 43,415 | € 1,200 | ||
Interest rate swap | ||||||
Notional amounts of outstanding derivatives instruments designated as cash flow hedges | ||||||
Notional amount | $ 69,354 | $ 34,354 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Total long-term debt and finance lease obligations | $ 675,368 | $ 603,020 |
Recurring | Level 2 | Carrying Amount | ||
2026 Notes | 593,762 | 593,476 |
Other long-term debt and finance lease obligations | 81,606 | 9,544 |
Total long-term debt and finance lease obligations | 675,368 | 603,020 |
Recurring | Level 2 | Fair Value | ||
2026 Notes | 591,000 | 644,250 |
Other long-term debt and finance lease obligations | 81,606 | 9,544 |
Total long-term debt and finance lease obligations | $ 672,606 | $ 653,794 |
Long-Term Debt and Finance Le_3
Long-Term Debt and Finance Lease Obligations - Capital Lease Obligation Table (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract] | ||
Finance leases | $ 9,602 | $ 7,538 |
Total long-term debt and finance lease obligations | 675,368 | 603,020 |
Less current portion of long-term debt and finance lease obligations | (7,583) | (6,590) |
Long-term debt and finance lease obligations, excluding current installments | 667,785 | 596,430 |
Revolving credit commitments | ||
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract] | ||
Long-term debt | 0 | |
Line of credit amount outstanding | 70,000 | 0 |
Other loans | ||
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract] | ||
Long-term debt | 2,004 | 2,006 |
Finance leases | ||
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract] | ||
Finance leases | 9,602 | 7,538 |
Senior notes | ||
Long-term Debt and Lease Obligation, Including Current Maturities [Abstract] | ||
Long-term debt | 593,762 | 593,476 |
Unamortized discount, premium and debt issuance | $ 6,300 | $ 6,500 |
Long-Term Debt and Finance Le_4
Long-Term Debt and Finance Lease Obligations - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Revolving credit commitments | ||
Long term debt and finance lease obligations | ||
Line of credit amount outstanding | $ 70,000 | $ 0 |
Related-Party Transactions - Sc
Related-Party Transactions - Schedule of Related Party Amounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other revenue | ||
Related Party Transaction [Line Items] | ||
Related party revenue | $ 606 | $ 592 |
Cost of goods sold | ||
Related Party Transaction [Line Items] | ||
Related party expenses | 33,617 | 19,998 |
General and administrative expenses | ||
Related Party Transaction [Line Items] | ||
Related party expenses | $ 7,689 | $ 6,296 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) T in Thousands, $ in Thousands | Apr. 02, 2019USD ($) | Mar. 31, 2020USD ($)MTT | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | ||||
MSA fee waivers | $ 3,186 | $ 0 | ||
Finished goods | 9,475 | $ 2,718 | ||
Related-party payables | 2,480 | 304 | ||
Cost of goods sold | 177,170 | 148,462 | ||
Related-party management services agreement fee | 7,689 | 6,296 | ||
Enviva FiberCo LLC | ||||
Related Party Transaction [Line Items] | ||||
Related-party payables | 100 | |||
Cost of goods sold | Enviva FiberCo LLC | ||||
Related Party Transaction [Line Items] | ||||
Purchase of wood pellets net cost of cover deficiency fee | 1,000 | |||
Purchase of raw materials | 1,400 | |||
MSAs | ||||
Related Party Transaction [Line Items] | ||||
Finished goods | 1,252 | 419 | ||
Related-party payables | 15,227 | $ 18,703 | ||
Cost of goods sold | 13,260 | 13,554 | ||
Related-party management services agreement fee | 7,689 | 6,296 | ||
Hamlet JV MSA Fee Waiver | Partners' capital | ||||
Related Party Transaction [Line Items] | ||||
Fee waived | $ 2,700 | |||
MSA fee waivers | 700 | 0 | ||
First EVA MSA Fee Waiver | ||||
Related Party Transaction [Line Items] | ||||
Fee waived | $ 13,000 | |||
First EVA MSA Fee Waiver | Partners' capital | ||||
Related Party Transaction [Line Items] | ||||
MSA fee waivers | 2,500 | |||
Make-Whole agreement | Cost of goods sold | ||||
Related Party Transaction [Line Items] | ||||
Purchase of wood pellets net cost of cover deficiency fee | 10,600 | |||
Make-Whole agreement | Finished goods inventory | ||||
Related Party Transaction [Line Items] | ||||
Purchase of wood pellets net cost of cover deficiency fee | $ 2,200 | |||
Greenwood Contract | ||||
Related Party Transaction [Line Items] | ||||
Annual volume of wood pellets to be purchased | T | 550 | |||
Wood pellets purchased | $ 9,900 | 10,500 | ||
Costs to cover fees | 400 | 2,900 | ||
Purchase of wood pellets net cost of cover deficiency fee | 9,500 | 7,600 | ||
Greenwood Contract | Finished goods inventory | ||||
Related Party Transaction [Line Items] | ||||
Purchase of wood pellets net cost of cover deficiency fee | 1,100 | 100 | ||
Greenwood Contract | Cost of goods sold | ||||
Related Party Transaction [Line Items] | ||||
Purchase of wood pellets net cost of cover deficiency fee | $ 8,400 | 7,500 | ||
Terminal Services Agreement | Sponsor | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Quarterly amounts of pellets to be delivered | MT | 125,000 | |||
Terminal Services Agreement | Other revenue | ||||
Related Party Transaction [Line Items] | ||||
Deficiency fees received | $ 600 | $ 600 |
Partners' Capital - Narrative (
Partners' Capital - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 29, 2020 | Jan. 29, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | May 02, 2019 | Mar. 31, 2020 |
Incentive Distribution Rights | ||||||
Distribution to General Partner | 100.00% | |||||
Distribution Per Unit (in dollars per unit) | $ 0.6750 | $ 0.6700 | $ 0.6600 | $ 0.6450 | ||
Total Cash Distribution | $ 22.7 | $ 22.4 | $ 22.1 | $ 21.6 | ||
Total Payment to General Partner for Incentive Distribution Rights | $ 3.3 | $ 3.1 | $ 2.8 | $ 2.3 | ||
Minimum | General Partner Interest | ||||||
Incentive Distribution Rights | ||||||
Quarterly distribution of operating surplus (as a percent) | 15.00% | |||||
Maximum | General Partner Interest | ||||||
Incentive Distribution Rights | ||||||
Quarterly distribution of operating surplus (as a percent) | 50.00% | |||||
Subsequent Event | ||||||
Incentive Distribution Rights | ||||||
Distribution Per Unit (in dollars per unit) | $ 0.6800 | |||||
Total Cash Distribution | $ 22.9 | |||||
Total Payment to General Partner for Incentive Distribution Rights | $ 3.5 |
Equity-Based Awards - Schedule
Equity-Based Awards - Schedule of Phantom Unit Awards (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Affiliate Grants | |
Units | |
Nonvested at the beginning of the period (in units) | shares | 1,309,556 |
Granted (in units) | shares | 901,500 |
Forfeitures (in units) | shares | (60,262) |
Vested (in units) | shares | (232,922) |
Nonvested at the end of the period (in units) | shares | 1,917,872 |
Weighted- Average Grant Date Fair Value (per unit) | |
Nonvested at the beginning of the period (in dollars per unit) | $ / shares | $ 28.88 |
Granted (in dollars per unit) | $ / shares | 37.99 |
Forfeitures (in dollar per unit) | $ / shares | 27.52 |
Vested (in dollars per unit) | $ / shares | 25.28 |
Nonvested at the end of the period (in dollars per unit) | $ / shares | $ 33.64 |
Affiliate Grants | Time-Based Phantom Units | |
Units | |
Nonvested at the beginning of the period (in units) | shares | 874,286 |
Granted (in units) | shares | 523,012 |
Forfeitures (in units) | shares | (22,324) |
Vested (in units) | shares | (179,277) |
Nonvested at the end of the period (in units) | shares | 1,195,697 |
Weighted- Average Grant Date Fair Value (per unit) | |
Nonvested at the beginning of the period (in dollars per unit) | $ / shares | $ 28.90 |
Granted (in dollars per unit) | $ / shares | 37.99 |
Forfeitures (in dollar per unit) | $ / shares | 30.49 |
Vested (in dollars per unit) | $ / shares | 25.25 |
Nonvested at the end of the period (in dollars per unit) | $ / shares | $ 33.39 |
Affiliate Grants | Performance-Based Phantom Units | |
Units | |
Nonvested at the beginning of the period (in units) | shares | 435,270 |
Granted (in units) | shares | 378,488 |
Forfeitures (in units) | shares | (37,938) |
Vested (in units) | shares | (53,645) |
Nonvested at the end of the period (in units) | shares | 722,175 |
Weighted- Average Grant Date Fair Value (per unit) | |
Nonvested at the beginning of the period (in dollars per unit) | $ / shares | $ 28.84 |
Granted (in dollars per unit) | $ / shares | 37.99 |
Forfeitures (in dollar per unit) | $ / shares | 25.78 |
Vested (in dollars per unit) | $ / shares | 25.39 |
Nonvested at the end of the period (in dollars per unit) | $ / shares | $ 34.06 |
Director Grants | Time-Based Phantom Units | |
Units | |
Nonvested at the beginning of the period (in units) | shares | 13,264 |
Granted (in units) | shares | 12,112 |
Vested (in units) | shares | (13,264) |
Nonvested at the end of the period (in units) | shares | 12,112 |
Weighted- Average Grant Date Fair Value (per unit) | |
Nonvested at the beginning of the period (in dollars per unit) | $ / shares | $ 30.16 |
Granted (in dollars per unit) | $ / shares | 37.98 |
Vested (in dollars per unit) | $ / shares | 30.16 |
Nonvested at the end of the period (in dollars per unit) | $ / shares | $ 37.98 |
Equity-Based Awards - Narrative
Equity-Based Awards - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Equity-Based Awards | ||||
Payment for withholding tax | $ 3,727 | $ 0 | ||
Affiliate Grants | ||||
Equity-Based Awards | ||||
Unrecognized estimated compensation cost | 23,200 | |||
Time-Based Phantom Units | Director Grants | ||||
Equity-Based Awards | ||||
Fair value of units granted | $ 500 | |||
Unit based compensation expense | 100 | |||
Unrecognized estimated compensation cost | 400 | |||
DER | ||||
Equity-Based Awards | ||||
Distributions paid related to DERs | 600 | 900 | ||
Unpaid DER | 2,053 | $ 1,590 | ||
DER | Related-party payables | ||||
Equity-Based Awards | ||||
Distributions paid related to DERs | 800 | $ 600 | ||
Unpaid DER | 394 | 0 | ||
DER | Accrued liabilities | ||||
Equity-Based Awards | ||||
Unpaid DER | 759 | 397 | ||
DER | Other long-term liabilities | ||||
Equity-Based Awards | ||||
Unpaid DER | $ 900 | $ 1,193 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Reserves for uncertain tax positions | $ 0 | |
Reserves for interest and penalties | $ 0 | |
Provision for income tax | $ 0 | $ 0 |
Net Income (Loss) per Limited_3
Net Income (Loss) per Limited Partner Unit - Basic and Diluted Table (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Common Units | ||
Weighted average number of units outstanding | ||
Weighted-average units outstanding—basic (in units) | 33,551 | 26,759 |
Effect of nonvested phantom units | 1,885 | 0 |
Weighted-average common units outstanding—diluted (in units) | 35,436 | 26,759 |
General Partner | ||
Weighted average number of units outstanding | ||
Weighted-average units outstanding—basic (in units) | 0 | 0 |
Effect of nonvested phantom units | 0 | 0 |
Weighted-average common units outstanding—diluted (in units) | 0 | 0 |
Net Income (Loss) per Limited_4
Net Income (Loss) per Limited Partner Unit - Net Income Per Unit Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Income (Loss) per Limited Partner Unit | ||
Distributions declared | $ 26,313 | $ 23,850 |
Earnings less than distributions | (19,503) | (32,773) |
Net income (loss) available to partners | $ 6,810 | $ (8,923) |
Net income per limited partner unit—basic (in dollars per unit) | $ 0.10 | $ (0.42) |
Net income per limited partner unit—diluted (in dollars per unit) | $ 0.09 | $ (0.42) |
Common Units | ||
Net Income (Loss) per Limited Partner Unit | ||
Distributions declared | $ 22,856 | $ 21,580 |
Earnings less than distributions | (19,503) | (32,773) |
Net income (loss) available to partners | $ 3,353 | $ (11,193) |
Weighted-average common units outstanding—basic (in units) | 33,551 | 26,759 |
Weighted-average units outstanding—diluted (in units) | 35,436 | 26,759 |
Weighted-average common units outstanding—basic and diluted (in units) | 26,759 | |
Net income per limited partner unit—basic (in dollars per unit) | $ 0.10 | |
Net income per limited partner unit—diluted (in dollars per unit) | $ 0.09 | |
Net loss per limited partner unit—basic and diluted (in dollars per unit) | $ (0.42) | |
General Partner | ||
Net Income (Loss) per Limited Partner Unit | ||
Distributions declared | $ 3,457 | $ 2,270 |
Earnings less than distributions | 0 | 0 |
Net income (loss) available to partners | $ 3,457 | $ 2,270 |
Weighted-average common units outstanding—basic (in units) | 0 | 0 |
Weighted-average units outstanding—diluted (in units) | 0 | 0 |
Net Income (Loss) per Limited_5
Net Income (Loss) per Limited Partner Unit - Schedule of Cash Distribution Paid or Declared (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 29, 2020 | Jan. 29, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | May 02, 2019 |
Distribution Made to Limited Partner [Line Items] | |||||
Distribution Per Unit (in dollars per unit) | $ 0.6750 | $ 0.6700 | $ 0.6600 | $ 0.6450 | |
Total Cash Distribution | $ 22.7 | $ 22.4 | $ 22.1 | $ 21.6 | |
Total Payment to General Partner for Incentive Distribution Rights | $ 3.3 | $ 3.1 | $ 2.8 | $ 2.3 | |
Subsequent Event | |||||
Distribution Made to Limited Partner [Line Items] | |||||
Distribution Per Unit (in dollars per unit) | $ 0.6800 | ||||
Total Cash Distribution | $ 22.9 | ||||
Total Payment to General Partner for Incentive Distribution Rights | $ 3.5 |