Enviva
Annual Report 2017

Plain-text annual report

Morningstar® Document Research℠ FORM 10-KEnviva Partners, LP - EVAFiled: February 22, 2018 (period: December 31, 2017)Annual report with a comprehensive overview of the companyThe information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The userassumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot belimited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 Form 10-K ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2017or☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number 001-37363 Enviva Partners, LP(Exact name of registrant as specified in its charter) Delaware 46-4097730(State or other jurisdiction (I.R.S. Employerof incorporation or organization) Identification No.) 7200 Wisconsin Ave, Suite 1000 Bethesda, MD 20814(Address of principal executive offices) (Zip code) (301) 657-5560(Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registeredCommon Units Representing Limited Partner Interests New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. Yes ☒No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). Yes ☒No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, andwill not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10-K. ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule12b-2 of the Exchange Act. Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer ☐Smaller reporting company ☐ (Do not check if asmaller reporting company)Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any newor revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐No ☒ The aggregate market value of the common units held by non-affiliates of the registrant as of June 30, 2017 was approximately $359.3 million, basedupon a closing price of $27.50 per common unit as reported on the New York Stock Exchange on such date. As of February 16, 2018, 14,445,268 common units and 11,905,138 subordinated units were outstanding. Documents Incorporated by Reference: None. Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LPANNUAL REPORT ON FORM 10‑KTABLE OF CONTENTSCautionary Statement Regarding Forward‑Looking Statements 1Glossary of Terms 3Part I 4Item 1. Business4Item 1A. Risk Factors19Item 1B. Unresolved Staff Comments44Item 2. Properties44Item 3. Legal Proceedings44Item 4. Mine Safety Disclosures45Part II 46Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases ofEquity Securities46Item 6. Selected Financial Data48Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations52Item 7A. Quantitative and Qualitative Disclosures About Market Risk77Item 8. Financial Statements and Supplementary Data79Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure131Item 9A. Controls and Procedures131Item 9B. Other Information131Part III 132Item 10. Directors, Executive Officers and Corporate Governance132Item 11. Executive Compensation139Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters145Item 13. Certain Relationships and Related Transactions, and Director Independence147Item 14. Principal Accounting Fees and Services151Part IV 153Item 15. Exhibits, Financial Statement Schedules153 i Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCAUTIONARY STATEMENT REGARDING FORWARD‑LOOKING STATEMENTSCertain statements and information in this Annual Report on Form 10‑K (this “Annual Report”) may constitute“forward‑looking statements.” The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,”“could” or other similar expressions are intended to identify forward‑looking statements, which are generally not historical innature. These forward‑looking statements are based on our current expectations and beliefs concerning future developmentsand their potential effect on us. Although management believes that these forward‑looking statements are reasonable as andwhen made, there can be no assurance that future developments affecting us will be those that we anticipate. All commentsconcerning our expectations for future revenues and operating results are based on our forecasts for our existing operationsand do not include the potential impact of any future acquisitions. Our forward‑looking statements involve significant risksand uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materiallyfrom our historical experience and our present expectations or projections. Important factors that could cause actual results todiffer materially from those in the forward‑looking statements include, but are not limited to, those summarized below:·the volume and quality of products that we are able to produce or source and sell, which could be adverselyaffected by, among other things, operating or technical difficulties at our plants or deep-water marine terminals;·the prices at which we are able to sell our products;·failure of the Partnership’s customers, vendors and shipping partners to pay or perform their contractualobligations to the Partnership;·the creditworthiness of our contract counterparties;·the amount of low‑cost wood fiber that we are able to procure and process, which could be adversely affectedby, among other things, operating or financial difficulties suffered by our suppliers;·changes in the price and availability of natural gas, coal or other sources of energy;·changes in prevailing economic conditions;·our inability to complete acquisitions, including acquisitions from our sponsor, or to realize the anticipatedbenefits of such acquisitions;·inclement or hazardous environmental conditions, including extreme precipitation, temperatures and flooding;·fires, explosions or other accidents;·changes in domestic and foreign laws and regulations (or the interpretation thereof) related to renewable orlow‑carbon energy, the forestry products industry, the international shipping industry or power generators;·changes in the regulatory treatment of biomass in core and emerging markets;·our inability to acquire or maintain necessary permits or rights for our production, transportation or terminalingoperations;·changes in the price and availability of transportation;·changes in foreign currency exchange or interest rates, and the failure of our hedging arrangements toeffectively reduce our exposure to the risks related thereto;1 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents·risks related to our indebtedness;·our failure to maintain effective quality control systems at our production plants and deep‑water marineterminals, which could lead to the rejection of our products by our customers;·changes in the quality specifications for our products that are required by our customers;·labor disputes;·the effects of the anticipated exit of the United Kingdom (“Brexit”) from the European Union on our and ourcustomers’ businesses; and·our ability to borrow funds and access capital markets.All forward‑looking statements in this Annual Report are expressly qualified in their entirety by the foregoingcautionary statements.Please read Part I, Item 1A. “Risk Factors.” Readers are cautioned not to place undue reliance on forward‑lookingstatements and we undertake no obligation to update or revise any such statements after the date they are made, whether as aresult of new information, future events or otherwise. 2 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsGLOSSARY OF TERMSbiomass: any organic biological material, derived from living organisms, which stores energy from the sun.co‑fire: the combustion of two different types of materials at the same time. For example, biomass is sometimes firedin combination with coal in existing coal plants.cost pass‑through: a mechanism in commercial contracts that passes costs through to the purchaser.dry-bulk: describes dry-bulk commodities that are shipped in large, unpackaged amounts.metric ton: one metric ton, which is equivalent to 1,000 kilograms. One metric ton equals 1.1023 short tons.net calorific value: the amount of usable heat energy released when a fuel is burned completely and the heatcontained in the water vapor generated by the combustion process is not recovered. The European power industry typicallyuses net calorific value as the means of expressing fuel energy.off‑take contract: an agreement between a producer of a resource and a buyer of a resource to purchase a certainvolume of the producer’s future production.ramp: a period of time of increasing production following the startup of a plant or completion of a project.Riverstone: Riverstone Holdings LLC.Riverstone Funds: Riverstone/Carlyle Renewable and Alternative Energy Fund II, L.P. and certain affiliatedentities, collectively.stumpage: the price paid to the underlying timber resource owner for the raw material.utility‑grade wood pellets: wood pellets meeting minimum requirements generally specified by industrialconsumers and produced and sold in sufficient quantities to satisfy industrial‑scale consumption.wood fiber: cellulosic elements that are extracted from trees and used to make various materials, including paper. InNorth America, wood fiber is primarily extracted from hardwood (deciduous) trees and softwood (coniferous) trees.wood pellets: energy‑dense, low‑moisture and uniformly‑sized units of wood fuel produced from processing variouswood resources or byproducts.3 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART I ITEM 1. BUSINESSReferences in this Annual Report to the “Predecessor,” “our Predecessor,” “we,” “our,” “us” or like terms forperiods prior to April 9, 2015 refer to Enviva, LP and its subsidiaries (other than Enviva Pellets Cottondale, LLC).References to the “Partnership,” “we,” “our,” “us” or like terms for periods on and after April 9, 2015 refer to EnvivaPartners, LP and its subsidiaries. References to “our sponsor” refer to Enviva Holdings, LP, and, where applicable, itswholly owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC. References to “our GeneralPartner” refer to Enviva Partners GP, LLC, a wholly owned subsidiary of Enviva Holdings, LP. References to “EnvivaManagement” refer to Enviva Management Company, LLC, a wholly owned subsidiary of Enviva Holdings, LP, andreferences to “our employees” refer to the employees of Enviva Management. References to the “First Hancock JV” and the“Second Hancock JV” refer to Enviva Wilmington Holdings, LLC and Enviva JV Development Company, LLC, respectively,which are joint ventures between our sponsor, Hancock Natural Resource Group, Inc. and certain other affiliates of JohnHancock Life Insurance Company (U.S.A.). Please read Cautionary Statement Regarding Forward‑Looking Statements onpage 1 and Item 1A. “Risk Factors” for information regarding certain risks inherent in our business.OverviewWe are the world’s largest supplier by production capacity of utility‑grade wood pellets to major power generators.Since our entry into this business in 2010, we have executed multiple long‑term, take‑or‑pay off‑take contracts with utilitiesand large scale power generators and have built and acquired the production and terminaling capacity necessary to servethem. Our existing production constitutes approximately 14% of current global utility‑grade wood pellet productioncapacity and the product we deliver to our customers typically comprises a material portion of their fuel supply. We own andoperate six industrial‑scale production plants in the Southeastern United States that have a fully contracted combined woodpellet production capacity of 2.9 million metric tons per year (“MTPY”). We constructed four of our production plants usingour templated design and standardized equipment. A fifth plant, our largest in terms of production capacity, has been inoperation since 2008. We also own dry‑bulk, deep‑water marine terminal assets at the Port of Chesapeake, Virginia (the“Chesapeake terminal”) and the Port of Wilmington, North Carolina (the “Wilmington terminal”), which reduce our storageand shiploading costs and enable us to reliably supply our customers. All of our facilities are located in geographic regionswith low input costs and favorable transportation logistics. Owning these cost‑advantaged assets in a rapidly expandingindustry provides us with a platform to generate stable and growing cash flows that we anticipate will enable us to increaseour per‑unit cash distributions over time, which is our primary business objective.We were formed on November 12, 2013 as a wholly owned subsidiary of our sponsor. On April 9, 2015, our sponsorcontributed certain of our Predecessor’s assets and liabilities to us. On May 4, 2015, we completed an initial public offering(the “IPO”) of common units representing limited partner interests in the Partnership (“common units”). Our assets andoperations are organized into a single reportable segment and are all located and conducted in the United States. Please readPart II, Item 8. “Financial Statements and Supplementary Data—Note 1, Description of Business and Basis of Presentation”for further discussion regarding our formation and organization.We procure wood fiber and process it into utility‑grade wood pellets at our production plants. We load the finishedwood pellets into railcars, trucks and barges that are transported to our owned or leased deep‑water marine terminal assets,where they are received, stored and ultimately loaded onto oceangoing vessels for transport to our principally Europeancustomers.Our customers use our wood pellets as a substitute fuel for coal in dedicated biomass or co‑fired coal power plants.Wood pellets serve as a suitable “drop‑in” alternative to coal because of their comparable heat content, density and form.Due to the uninterruptible nature of our customers’ fuel consumption, our customers require a reliable supply of wood pelletsthat meet stringent product specifications. We have built our operations and assets to deliver and certify the highest levels ofproduct quality, and our proven track record enables us to charge premium prices for this certainty. In addition to ourcustomers’ focus on the reliability of supply, they are concerned about the combustion efficiency of4 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsthe wood pellets and their safe handling. Because combustion efficiency is a function of energy density, particle sizedistribution, ash/inert content and moisture, our customers require that we supply wood pellets meeting minimum criteria fora variety of specifications and, in some cases, provide incentives for exceeding our contract specifications.Industry OverviewOur product, utility‑grade wood pellets, is used as a substitute for coal in both dedicated and co‑fired powergeneration and combined heat and power plants. It enables major power generators to profitably generate electricity in amanner that reduces the overall cost of compliance with mandatory greenhouse gas (“GHG”) emissions limits and renewableenergy targets while also allowing countries to diversify their sources of electricity supply.Unlike intermittent sources of renewable generation like wind and solar power, wood pellet‑fired plants are capableof meeting baseload electricity demand and are dispatchable (that is, power output can be switched on or off or adjustedbased on demand). As a result, utilities and major power generators in Europe and Asia have made and continue to makelong‑term, profitable investments in power‑plant conversions and new builds of generating assets that either co‑fire woodpellets with coal or are fully dedicated wood pellet‑fired plants. Such developments help generators in European and Asianmarkets maintain and increase baseload generating capacity, comply with binding climate change regulations and otheremissions reduction targets and increase renewable energy usage at a lower cost to consumers and taxpayers than other formsof renewable energy generation.The capital costs required to convert a coal plant to co‑fire biomass, or to burn biomass exclusively, are a fraction ofthe capital costs associated with implementing offshore wind and most other renewable technologies. Furthermore, therelatively quick process of converting coal‑fired plants to biomass‑fired generation is an attractive benefit for powergenerators whose generation assets are no longer viable as coal plants due to the expiration of operating permits or theintroduction of taxes or other restrictions on fossil fuel usage or emissions of GHGs and other pollutants.There also continues to be significant growth in the European and Asian demand for wood pellets as the preferredfuel source and lower‑cost alternative to delivered fossil fuels for district heating loops, for heating homes and commercialbuildings and for the production of process heat at industrial sites. Increasingly, wood pellets are also being sought as a rawmaterial input for bio‑based substitutes for traditional fossil fuel‑based fuels and chemicals. As these markets further develop,there will continue to be opportunities for utility‑grade wood pellet producers to serve this growing demand.Recent DevelopmentsWilmington Drop‑DownOn October 2, 2017, pursuant to the terms of a contribution agreement by and between the Partnership and the FirstHancock JV (the “Wilmington Contribution Agreement”), the First Hancock JV sold to the Partnership all of the issued andoutstanding limited liability company interests in Enviva Port of Wilmington, LLC (“Wilmington”), which owns theWilmington terminal. We refer to this transaction as the “Wilmington Drop-Down.”The purchase price for Wilmington was $130.0 million, which included an initial payment of $54.6 million, net ofan approximate purchase price adjustment of $1.4 million. The initial payment was funded with borrowings from revolvingcredit commitments and cash on hand. We accounted for the Wilmington Drop-Down as a combination of entities undercommon control at historical cost in a manner similar to a pooling of interests. Accordingly, the consolidated financialstatements for the periods prior to the acquisition were retrospectively recast to reflect the acquisition as if it had occurred onMay 15, 2013, the date Wilmington was originally organized.The Wilmington terminal, which is capable of receiving product by rail and truck, has the capacity to store up to90,000 metric tons (“MT”) of wood pellets, and load up to Panamax-sized vessels. It utilizes state-of-the-art handlingequipment and storage infrastructure designed to maintain product quality and safety with throughput capacity of up to 3.0million MTPY of wood pellets.5 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWilmington will handle up to approximately 600,000 MTPY of throughput from our wood pellet production plantlocated in Sampson, North Carolina (the “Sampson plant”) and is party to a long-term terminal services agreement withEnviva Pellets Greenwood, LLC, a wholly owned subsidiary of the Second Hancock JV (“Greenwood”). Wilmington willhandle throughput volumes sourced from Greenwood’s wood pellet production plant located in Greenwood, South Carolina(the “Greenwood plant”). The terminal services agreement with Greenwood provides for deficiency payments to Wilmingtonif minimum throughput requirements are not met.In addition, the Wilmington Contribution Agreement contemplates that Wilmington will enter into a long-termterminal services agreement (the “Wilmington Hamlet TSA”) with the First Hancock JV and Enviva Pellets Hamlet, LLC(“Hamlet”) to receive, store and load wood pellets from the First Hancock JV’s proposed production plant in Hamlet, NorthCarolina (the “Hamlet plant”) when the First Hancock JV completes construction of the Hamlet plant. The WilmingtonHamlet TSA also provides for deficiency payments to Wilmington if minimum throughput requirements are not met. Pursuantto the Wilmington Contribution Agreement, following notice of the anticipated first delivery of wood pellets to theWilmington terminal from the Hamlet plant, Wilmington, Hamlet, and the First Hancock JV would enter into the WilmingtonHamlet TSA and the Partnership would make a final payment of $74.0 million in cash or common units to the First HancockJV, subject to certain conditions, as deferred consideration for the Wilmington Drop-Down.Wilmington also entered into a throughput option agreement with the sponsor granting the sponsor, subject tocertain conditions, the option to obtain terminal services at the Wilmington terminal at marginal cost throughput rates forwood pellets produced by one of the sponsor’s potential wood pellet production plants. Senior Notes Due 2021On November 1, 2016, we issued $300.0 million in aggregate principal amount of 8.5% senior unsecured notes dueNovember 1, 2021 (the “Senior Notes”) to eligible purchasers in a private placement transaction. In August 2017, holders of100% of the Senior Notes tendered such notes in exchange for newly issued registered notes with terms substantiallyidentical to the Senior Notes (except that the registered notes are not subject to restrictions on transfer).On October 10, 2017, we completed the issuance to an institutional investor in a private placement transaction of anadditional $55.0 million in aggregate principal amount of Senior Notes at a price of 106.25% of par plus accrued interestfrom May 1, 2017. The additional Senior Notes have the same terms as our outstanding Senior Notes.The sale of the additional Senior Notes at a purchase price of $58.4 million resulted in gross proceeds ofapproximately $60.0 million, after including accrued interest of $2.1 million and deducting estimated expenses ofapproximately $0.5 million. The net proceeds were used to repay the borrowings on our revolving credit facility that wereused to fund the Wilmington Drop-Down and for general partnership purposes.In December 2017, the holder of the additional Senior Notes tendered such notes in exchange for newly issuedregistered notes with terms substantially identical to such additional Senior Notes (except that the registered notes are notsubject to restrictions on transfer). The additional Senior Notes will be treated together with the outstanding Senior Notes as asingle class for all purposes under the Indenture.Sale of the Wiggins PlantIn December 2016, we initiated a plan to sell our 110,000 MTPY production plant located in Wiggins, Mississippiand related assets (the “Wiggins plant”). We sold the Wiggins plant to a third-party buyer for a purchase price of $0.4 millionon December 27, 2017, and on December 28, 2017, Enviva Pellets Wiggins, LLC (“Wiggins”), the owner of the Wigginsplant, was dissolved. We recorded a loss on the sale of $0.8 million, net, upon deconsolidation.At‑the‑Market Offering ProgramOn August 8, 2016, we filed a prospectus supplement to our shelf registration filed with the U.S. SecuritiesExchange Act Commission (“SEC”) on June 24, 2016, for the continuous offering of up to $100.0 million of common6 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsunits, in amounts, at prices and on terms to be determined by market conditions and other factors at the time of our offerings.In August 2016, we also entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certainmanagers pursuant to which we may offer and sell common units from time to time through or to one or more of the managers,subject to the terms and conditions set forth in the Equity Distribution Agreement, of up to an aggregate sales amount of$100.0 million (the “ATM Program”).During the years ended December 31, 2017 and 2016, we sold 71,368 and 358,593 common units, respectively,under the Equity Distribution Agreement for net proceeds of $1.9 million, net of an insignificant amount of commissions,during 2017, and net proceeds of $9.3 million, net of $0.1 million of commissions, during 2016. Accounting and other feesof approximately $0.2 million were offset against the proceeds during 2017. Deferred issuance costs of approximately$0.4 million, primarily consisting of legal, accounting and other fees, were offset against the proceeds during 2016. Netproceeds from sales under the ATM Program were used for general partnership purposes. As of February 16, 2018,$88.6 million of common units remained available for issuance under the ATM Program.Assets and OperationsOur Production PlantsWe own and operate six industrial‑scale wood pellet production plants located in the Mid‑Atlantic and the GulfCoast regions of the United States, geographic areas in which wood fiber resources are plentiful and readily available. Thesefacilities are designed to operate 24 hours per day, 365 days per year, although we schedule up to 15 days of maintenance forour plants during each calendar year. There are no regularly required major turnarounds or overhauls.Mid‑Atlantic Region PlantsThe following table describes our four wood pellet production plants in the Mid‑Atlantic region: Current Annual Operations ProductionPlant Location Commenced (MTPY)Ahoskie, North Carolina 2011 400,000Northampton, North Carolina 2013 550,000Sampson, North Carolina 2016 545,000Southampton, Virginia 2013 550,000Total 2,045,000AhoskieWe acquired the site of the Ahoskie plant in December 2010 and constructed a dedicated wood pellet productionplant in Ahoskie, North Carolina (the “Ahoskie plant”) in less than one year, commencing operations in November 2011.Through an expansion completed in June 2012, we increased the plant’s production from 260,000 MTPY to 350,000 MTPYand have made further improvements to increase production to its current capacity of 400,000 MTPY.Production from the Ahoskie plant is transported by truck to our Chesapeake terminal.NorthamptonOur wood pellet production plant in Northampton, North Carolina (the “Northampton plant”) was constructed basedon the Ahoskie plant design, utilizing the same major equipment suppliers. The Northampton plant currently produces550,000 MTPY of wood pellets.Production from the Northampton plant is transported by truck to our Chesapeake terminal.7 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSampsonThe Sampson plant, which we acquired from the First Hancock JV in December 2016, commenced operations duringthe fourth quarter of 2016. The Sampson plant was built based on our templated design and we believe that it will produce545,000 MTPY of wood pellets in 2018 and reach an annual production capacity of 600,000 MTPY by 2019.Production from the Sampson plant is transported by truck to our Wilmington terminal.SouthamptonWe acquired a wood pellet production plant in Southampton County, Virginia (the “Southampton plant”) from theFirst Hancock JV in December 2015 (the “Southampton Drop‑Down”). The Southampton plant is a build‑and‑copy replica ofour Northampton plant and currently produces 550,000 MTPY of wood pellets.Production from the Southampton plant is transported by truck to our Chesapeake terminal.Gulf Coast Region PlantsThe following table describes our two wood pellet production plants in the Gulf Coast region: Current Annual ProductionPlant Location Acquisition Date (MTPY)Cottondale, Florida 2015 730,000Amory, Mississippi 2010 120,000Total 850,000CottondaleOur sponsor acquired Green Circle Bio Energy, Inc., which owns a wood pellet production plant in Cottondale,Florida (the “Cottondale Plant”), in January 2015, changed the name of this entity to Enviva Pellets Cottondale, LLC(“Cottondale”) and contributed Cottondale to us in April 2015. The Cottondale plant was commissioned in 2008 and hassince undergone several expansions and process improvements. Expansion projects during 2016 and 2017 increasedproduction from 720,000 MTPY to 730,000 MTPY.Production from the Cottondale plant is transported approximately 50 miles by short‑line rail to a warehouse thatcan store up to 32,000 MT of wood pellet inventory at a third-party deep water marine terminal located in Port Panama City,Florida (the “Panama City terminal”).AmoryWe purchased a wood pellet production plant in Amory, Mississippi (the “Amory plant”) in August 2010. TheAmory plant initially consisted of three pellet mills producing at a rate of 41,500 MTPY. Through basic operationalimprovements and installation of a fourth pellet mill, the Amory plant currently produces 120,000 MTPY.Production from the Amory plant is transported by barge to a third‑party deep‑water marine terminal in Mobile,Alabama (the “Mobile terminal”).8 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsLogistics and Storage CapabilitiesTo‑Port Logistics and Port InfrastructureWe site our production plants to minimize wood fiber procurement and logistics costs. Our production plants arestrategically located in advantaged fiber baskets and near multiple truck, rail, river and ocean transportation access points.We also have inland waterway access and rail access at our Chesapeake terminal and Wilmington terminal and the PanamaCity terminal. Our multi‑year fixed‑cost contracts with third‑party logistics providers allow for long‑term visibility into ourto‑port logistics cost structure.The wood pellets produced at our plants must be stored, terminaled and shipped to our principally Europeancustomers. Limited deep‑water, bulk terminaling assets exist in the Southeastern United States, and very few of them have theappropriate handling and storage infrastructure necessary for receiving, storing and loading wood pellets. In response to suchscarcity, we have vertically integrated our Mid‑Atlantic operations downstream to encompass finished product logistics andstorage. As a largely fixed cost and capital intensive piece of the value chain, our port infrastructure allows us to shipincremental product from our regional plants at a small fraction of the cost of our competitors. Management of port terminalinfrastructure is also a key element in reducing distribution‑related costs as it allows us to manage the arrival and loading ofvessels. Additionally, we are able to improve our cost position by maintaining a dedicated berth where pellets from ourMid‑Atlantic region plants have priority and equipment with sufficient load-rate capabilities to turn around vessels withinthe allotted time windows.In addition to terminaling wood pellets from our production plants, we will, on occasion, provide terminalingservices for third‑ and related-party wood pellet producers as well as for owners of other dry-bulk commodities. Port Operation in the Mid‑Atlantic RegionWe acquired the Chesapeake terminal in January 2011 and converted it into a major dry‑bulk terminal. TheChesapeake terminal receives, stores and loads wood pellets for export and serves as the shipment point for productsproduced at our Ahoskie, Northampton and Southampton plants. The Chesapeake terminal accommodates Handysize,Supramax and Panamax‑sized vessels, and has a 200‑car rail yard adjacent to a Norfolk Southern track, a loading/unloadingsystem that accommodates deliveries by truck, rail and barge and a highly automated conveying system. In May 2011, weerected a 157‑foot tall, 175‑foot wide storage dome that receives, stores and loads up to 45,000 MT of wood pellets. In April2013, we placed into operation a second storage dome at the site to add an additional 45,000 MT of storage.The Chesapeake terminal’s storage and loading capacity is more than adequate to store and facilitate the loading ofthe wood pellets produced from our Northampton, Southampton and Ahoskie plants, and its location decreases ourcustomers’ transportation time and costs. Efficiently positioned near our Ahoskie, Northampton, and Southampton plants, theChesapeake terminal delivers up to a three‑ to four‑day European shipping advantage compared to other Southern or GulfCoast ports. In addition, because we own the Chesapeake terminal, we enjoy preferential berth access and loading, whichminimizes costs of shipping and logistics without the need for excess storage. Our ownership and operation of this terminalenable us to control shipment of the production of our Mid‑Atlantic region plants that it serves.Wood pellets produced at our Sampson plant are terminaled at our Wilmington terminal. The Wilmington terminalaccommodates Handysize, Supramax and Panamax‑sized vessels, and has a receiving system that accommodates deliveriesby truck and rail, a highly automated conveying system and two wood pellet storage domes with capacities of 45,000 MTeach. The Wilmington terminal’s storage and loading capacity is more than adequate to store and facilitate the loading ofpellets produced from our Sampson plant and its location decreases transportation time and costs through the entire supplychain. We benefit from preferential berth access and loading at our Wilmington terminal, which minimizes costs of shippingand logistics without the need for excess storage.9 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPort Operation in the Gulf Coast RegionWood pellets from our Cottondale plant are transported via short‑line rail to the Panama City terminal, where westore up to 32,000 MT of wood pellet inventory in a warehouse at Port Panama City. Production from the Cottondale plant isreceived, stored and loaded under a long‑term warehouse service agreement with the Panama City Port Authority and astevedoring contract, each of which runs through September 2023 and may be extended by us for an additional five-yearperiod.Wood pellets produced at our Amory plant are transported by barge to the Mobile terminal, where, pursuant to athroughput agreement with Cooper Marine & Timberlands (“Cooper”), we export from Cooper’s ChipCo terminal. Thisprivately owned and maintained deep‑water, multi‑berth terminal operates 24 hours per day, seven days per week and is thefleeting and loading point for production from our Amory plant. The Amory plant is sited along a major inland waterway thatmakes transportation to the Mobile terminal easy and efficient, thereby reducing emissions and costs. Our ability to store ourwood pellets in barges provides a capital‑light, flexible solution that accommodates the storage needs of the Amory plant.Please read Part II, Item 8. “Financial Statements and Supplementary Data—Significant Accounting Policies—Segment and Geographic Information” for more information regarding our plants, terminals and other long‑lived assets.Our Relationship with Our SponsorOur sponsor, Enviva Holdings, LP, is a majority owned subsidiary of the Riverstone Funds.Our sponsor owns approximately 9% of our common units, all of our subordinated units and our General Partner.Our General Partner owns our incentive distribution rights, which entitles our General Partner to increasing percentages ofour cash distributions above certain targets. As a result, our sponsor is incentivized to facilitate our access to accretiveacquisitions and organic growth opportunities, including those pursuant to the right of first offer it granted to us inconnection with our IPO.In November 2014, Enviva Development Holdings, LLC (“Development Holdings”) entered into the First HancockJV with Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life Insurance Company (U.S.A.)to acquire, develop and construct wood pellet production plants and deep-water marine terminals such as the Southampton,Sampson and Hamlet plants and the Wilmington terminal. In December 2017, Development Holdings entered into theSecond Hancock JV with Hancock Natural Resource Group, Inc. and certain other affiliates of John Hancock Life InsuranceCompany (U.S.A.) to acquire, develop and construct wood pellet production plants and deep-water marine terminals in theSoutheastern United States. Development Holdings is the managing member and Enviva Management is the operator of theHancock JVs; together, they are responsible for managing the activities of the First Hancock JV and the Second Hancock JV(together, the “Hancock JVs”), including the development and construction of the development projects of the Hancock JVs.Our Sponsor’s Assets and Development ProjectsHamlet PlantThe First Hancock JV has secured permits and commenced construction of the Hamlet plant, which is strategicallysited in an attractive wood fiber basket and will be constructed using our “build‑and‑copy” approach, using substantially thesame design and equipment as the Sampson plant. Production from the Hamlet plant, once completed, will be terminaled atthe Wilmington terminal.Greenwood PlantAs its first investment, the Second Hancock JV, through a wholly owned subsidiary, entered into an agreement topurchase the Greenwood plant. Upon closing, the Second Hancock JV intends to make investments in the Greenwood plantto improve its operational efficiency and increase its production capacity to 600,000 MTPY. The production of the10 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsGreenwood plant initially will be sold to the Partnership under a take-or-pay off-take contract and will continue to beexported from the Partnership’s Wilmington terminal.Other Sponsor Development ProjectsIn addition to the projects discussed above, the Second Hancock JV is pursuing the development of additionaldeep‑water marine terminals and production plants. The Second Hancock JV has executed an agreement with the JacksonCounty Port Authority granting the Second Hancock JV an option to build and operate a marine export terminal at the Port ofPascagoula, Mississippi, which would service new, regionally proximate production plants, including a potential productionplant in Lucedale, Mississippi.In connection with the closing of the IPO in 2015, we entered into a purchase rights agreement (the “PurchaseRights Agreement”) with our sponsor, pursuant to which our sponsor granted us a five‑year right of first offer to acquire anywood pellet production plants and associated deep‑water marine terminals that it or the Hancock JVs may develop or acquireand elect to sell. We expect to continue to pursue the acquisition of such assets from our sponsor and the Hancock JVs to theextent that they are supported by long‑term off‑take contracts with creditworthy counterparties and have long useful lives,stable cost positions and advantaged locations.Although we expect to continue to have the opportunity to acquire assets, including those described above, fromour sponsor and the Hancock JVs, there can be no assurance that our sponsor or the Hancock JVs will complete theirdevelopment projects or that our sponsor will decide to sell, or compel the Hancock JVs to sell, assets or completeddevelopment projects to us. The right of first offer under the Purchase Rights Agreement expires in May 2020.CustomersFor the year ended December 31, 2017, we generated substantially all of our revenues from sales under long‑termtake‑or‑pay off‑take contracts with customers outside of the United States. We seek to fully contract our production capacitythrough long‑term off‑take contracts and supplement such agreements with smaller contracts of intermediate or short durationto take advantage of opportunities in the market.Depending on the specific off‑take contract, shipping terms are either Cost, Insurance and Freight (“CIF”), Cost andFreight (“CFR”) or Free on Board (“FOB”). Under a CIF contract, we procure and pay for shipping costs, which includeinsurance and all other charges, up to the port of destination for the customer. Under a CFR contract, we procure and pay forshipping costs, which include insurance (excluding marine cargo insurance) and all other charges, up to the port ofdestination for the customer. Shipping costs under CIF and CFR contracts are included in the price to the customer and, assuch, are included in revenue and cost of goods sold. Under FOB contracts, the customer is directly responsible for shippingcosts. We seek to enter into fixed-price shipping contracts with reputable shippers matching the terms and volumes of ourcontracts for which we are responsible for arranging shipping.We have long-term, take‑or‑pay off‑take contracts with utilities and large European power generators such as DraxPower Limited (“Drax”), Ørsted Bioenergy & Thermal Power A/S (“Ørsted,” formerly known as “DONG Energy ThermalPower A/S”), Lynemouth Power Limited (“Lynemouth Power”), Engie Energy Management SCRL (“ENGIE”), MGT TeessideLimited (“MGT”) (through two contracts with the First Hancock JV) and RWE Supply and Trading GmbH (“RWE”). Drax Contracts. We began selling utility‑grade wood pellets pursuant to a take-or-pay off-take contract with Drax(the “First Drax Contract”) on April 1, 2013. We supplied 468,750 MT for the first delivery year and will supply 1.0 millionMTPY of wood pellets through 2022. In connection with the Southampton Drop‑Down, the First Hancock JV assigned to us aten‑year contract with Drax (the “Second Drax Contract”). The Second Drax Contract commenced on December 1, 2015, andwe supplied 385,000 MT for the first delivery year, supplied 500,000 MT for the second delivery year and will supply500,000 MTPY for years three through ten.Ørsted Contract. In connection with the Sampson Drop‑Down, the First Hancock JV assigned to us a ten‑yeartake‑or‑pay off‑take contract with Ørsted. This contract commenced September 1, 2016 and provides for sales of11 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents360,000 MTPY for the first delivery year and 420,000 MTPY for years two through ten. In the fourth quarter of 2017, thePartnership entered into an amendment to the contract with Ørsted for the supply of an incremental 200,000 MT from late2018 through mid-2021. Ørsted’s obligations under the contract are guaranteed by its parent, Ørsted A/S.Lynemouth Power Contract. We entered into a take‑or‑pay off‑take contract to supply wood pellets to LynemouthPower. Lynemouth Power is converting its coal‑fired power station in the United Kingdom to a biomass fired power station.Deliveries under this contract commenced in late 2017, are expected to ramp to full supply of 800,000 MTPY of wood pelletsin 2018, and will continue through the first quarter of 2027. The volumes under the Lynemouth Power Contract aredenominated in U.S. Dollars, except for 160,000 MTPY that are denominated in British Pound Sterling (“GBP”).ENGIE Contracts. We began selling 480,000 MTPY of utility‑grade wood pellets to Electrabel, a subsidiary ofENGIE, under a contract that commenced in June 2011 and continued through 2017. In May 2017 we entered into a newagreement to supply a total of 450,000 MT of wood pellets to ENGIE from mid-2017 through and including 2019. Werecently entered into two additional agreements with ENGIE to sell 90,000 MT in 2018 and an aggregate 585,000 MT from2019-2023.EVA‑MGT Contracts. We have contracted with the First Hancock JV to supply 375,000 MTPY of wood pellets (the“EVA-MGT Contract”) to MGT Teesside Limited’s Tees Renewable Energy Plant (the “Tees REP”). The EVA‑MGT Contractcommences in 2019, ramps to full supply in 2021, and continues through 2034. The EVA-MGT Contract is denominated inU.S. Dollars for commissioning volumes in 2019 and in GBP thereafter.In connection with the Sampson Drop‑Down, we entered into a second contract with the First Hancock JV to supplyan additional 95,000 MTPY of the contracted volume to the Tees REP. For more information on the EVA‑MGT Contracts,please read Part III, Item 13. “Certain Relationships and Related Transactions, and Director Independence—Agreements withAffiliates—EVA‑MGT Contracts.”RWE Contracts. We have contracted with RWE pursuant to two confirmations under master agreements to sell720,000 MT of wood pellets to RWE from our terminal locations and to purchase 720,000 MT of wood pellets from RWE inBritish Columbia during the period from January 2020 through December 2021.We also have entered into several other contracts that have smaller off-take quantities than the contracts describedabove. We diversified our customer base during 2017; however, our three largest customers accounted for 93% of thePartnership’s product sales in 2017.We refer to the structure of our contracts as “take‑or‑pay” because they include a firm obligation of the customer totake a fixed quantity of product at a stated price and provisions that compensate us in the case of our customer’s failure toaccept all or a part of the contracted volumes or for termination by our customer. Our long-term contracts typically providefor annual inflation‑based adjustments or price escalators. Certain of our long-term contracts also contain provisions thatallow us to increase or decrease the volume of product that we deliver by a percentage of the base volume of the contract, aswell as cost pass‑through provisions related to stumpage, fuel or transportation costs and price adjustments for actual productspecifications. In addition, certain of our long-term contracts and related arrangements provide for certain cost recovery andsharing arrangements in connection with certain changes in law or sustainability requirements as well as payments to us inthe case of their termination as a result of such changes.In addition to our long-term contracts, we also sell prompt deliveries of product to new and existing customers. Onoccasion, we will intermediate dislocations in the market by entering into back-to-back transactions with physical delivery.In some instances, a customer may request to cancel, defer, or accelerate a shipment. Contractually, we will seek to optimizeour position by selling or purchasing the subject shipment to or from another party, including in some cases a related party,either within our contracted off‑take portfolio or as an independent transaction on the spot market. In most instances, theoriginal customer pays us a fee, including reimbursement of any incremental costs, which is included in “Other revenue.” Wealso provide terminaling services for third‑party wood pellet producers as well as for owners of other bulk commodities.12 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsContracted BacklogAs of February 15, 2018, we had approximately $5.8 billion of product sales backlog for firm contracted productsales to major power generators compared to approximately $5.7 billion as of February 1, 2017. Backlog represents therevenue to be recognized under existing contracts assuming deliveries occur as specified in the contract. Expected futureproduct sales revenue denominated in foreign currencies, excluding revenue hedged with foreign currency forward contracts,are included in U.S. Dollars at February 15, 2018 forward rates. Please read Part II, Item 8. “Financial Statements andSupplementary Data—Derivative Instruments” for more information regarding our foreign currency forward contracts.Our expected future product sales revenue under our contracted backlog as of February 15, 2018 is as follows (inmillions):Period February 15, 2018 to December 31, 2018 $523Year Ended December 31, 2019 582Year Ended December 31, 2020 and thereafter 4,691Total product sales contracted backlog $5,796Wood Fiber ProcurementAlthough stumpage constitutes a small portion of our total cost of delivered products, wood fiber procurement is avital function of our business, and cost‑effective access to wood fiber is an important factor in our pricing stability. Our rawmaterials are byproducts of traditional timber harvesting, principally the tops and limbs of trees as well as other low‑valuewood materials that are generated in a harvest. We procure wood fiber directly from timber owners, loggers and othersuppliers. We also opportunistically acquire industrial residuals (sawdust and shavings) and forest residuals (woodchips andslash) when they provide a cost advantage. Due to the moisture content of unprocessed wood, it cannot be transportedeconomically over long distances. Therefore, the specific regional wood fiber resource supply and demand balance dictatesthe underlying economics of wood fiber procurement. For this reason, we have elected to site our facilities in some of themost robust and advantaged fiber baskets in the world.Our customers are subject to stringent requirements regarding the sustainability of the fuels they procure. In additionto our internal sustainability policies and initiatives, our wood fiber procurement is conducted in accordance with leadingforest certification standards. Our fiber supply chains are routinely audited by independent third parties. We maintainmultiple forest certifications including: Forest Stewardship Council (FSC®) Chain of Custody, FSC® Controlled Wood,Programme for the Endorsement of Forest Certification (PEFC™) Chain of Custody, Sustainable Forestry Initiative (SFI®)Fiber Sourcing and SFI® Chain of Custody. We have obtained independent third-party certification for our Ahoskie,Cottondale, Northampton, Sampson and Southampton plants to the applicable Sustainable Biomass Program (SBP) Standardsin 2016 and 2017. We expect that our Amory plant will obtain third-party SBP certification in early 2018.Our wood fiber demand is complementary to, rather than in competition with, demand for high‑grade wood for useby most other forest‑related industries, such as lumber and furniture making. For example, improvements in the U.S. housingconstruction industry increase the demand for construction‑quality lumber, which in turn increases the available supply ofthe low‑cost pulpwood and mill residues that are used in wood pellet production. By using commercial thinnings andbyproducts as raw materials, wood pellet production also indirectly supports other forest‑related industries as well as thesustainable management of commercial forests.The wood fiber used for wood pellet production comprises predominantly pulpwood, which derives its name fromits traditional use by the pulp and paper industry and includes roundwood (typically thinnings from forest managementoperations and the tops and branches from sawlogs), and wood residues (primarily mill residues, a byproduct of sawmillingand veneer mill operations). Our procured wood fiber consists of:·low‑grade wood fiber: wood that is unsuitable for or rejected by the sawmilling and lumber industries becauseof small size, defects (e.g. crooked or knotty), disease or pest infestation;13 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents·tops and limbs: the parts of trees that cannot be processed into lumber;·commercial thinnings: harvests that promote the growth of higher value timber by removing weaker ordeformed trees to reduce competition for water, nutrients and sunlight; and·mill residues: chips, sawdust and other wood industry byproducts.Demand for the non‑merchantable trees, waste products or byproducts that we use is generally low because theyhave few competing uses. The tops, limbs and other low‑grade wood fiber we purchase would otherwise generally be left onthe forest floor, impeding reforestation, or burned. Wood pellet production provides a profitable use for the residues fromsawmill and furniture industries and for the trees that are thinned to make room for higher value lumber‑grade timber. U.S.demand for such low grade wood fiber historically emerged from the pulp and paper industry. However, due to the decline indemand from paper and pulp, many landowners lack commercial markets for this wood fiber. Wood pellet producers help fillthe gap.As a result of the fragmented nature of tract ownership, we procure raw materials from hundreds of landowners,loggers and timber industry participants, with no individual landowner representing a material fraction of any of ourproduction plants’ needs. Our wood fiber is procured under a variety of arrangements, including (1) logging contracts for thethinnings, pulpwood and other unmerchandised chip‑and‑saw timber cut by a harvester, (2) in‑woods chipping contractswhere we may also provide the actual harvesting assets and (3) contracts with timber dealers. Via our internal Track and Tracesystem, we maintain 100% traceability of the primary wood that is delivered to us directly from forests. Any supplierdelivering wood to one of our plants must first share the details about the forest characteristics of the tract from which thewood is sourced with our forestry staff so we can verify that it meets our strict sustainability criteria. Our supplier contractsrequire a certification that the relevant tract information has been entered into our database before wood may be delivereddirectly from a particular tract. We summarize all such tract information periodically and publish tract‑level details on ourwebsite. During 2017, we sourced wood fiber from approximately 300 suppliers, including landowners growing bothhardwoods and softwoods and other suppliers. The diversity of our supply base enables us to maintain stable costs, and ourfacilities’ advantaged siting ensures consistent and reliable deliveries at lower cost than others in our region or industry.CompetitionWe compete with other utility‑grade wood pellet producers for long‑term, take‑or‑pay off‑take contracts with majorpower generation customers. Competition in our industry is based on the price, quality and consistency of the wood pelletsproduced, the reliability of wood pellet deliveries and the producer’s ability to verify and document, through customer andthird‑party audits, that its wood pellets meet the regulatory sustainability obligations of a particular customer.Most of the world’s current wood pellet production plants are owned by small, private companies, with fewcompanies owning or operating multiple plants. Few companies have the scale, technical expertise or commercialinfrastructure necessary to supply utility‑grade wood pellets under large, long‑term off‑take contracts with power generators.We are the largest producer by production capacity, and consider other companies with comparable scale, technicalexpertise or commercial infrastructure to be our competitors, including AS Graanul Invest, Pinnacle Renewable Energy Inc.,Drax Biomass Inc., Georgia Biomass, LLC, Fram Renewable Fuels, LLC, Highland Pellets LLC, Pacific BioEnergyCorporation, and The Westervelt Company.EmployeesWe are party to a management services agreement with Enviva Management, pursuant to which EnvivaManagement provides us with the employees, management and services necessary for the operation of our business. As ofDecember 31, 2017, Enviva Management had 652 employees. Please read Part II, Item 13. “Financial Statements and14 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsSupplementary Data—Related-Party Transactions” for more information regarding our management services agreement withEnviva Management.Environmental MattersOur operations are subject to stringent and comprehensive federal, state and local laws and regulations governingmatters including environmental protection, occupational health and safety and the release or discharge of materials into theenvironment, including air emissions and wastewater discharges. These laws and regulations may (i) require acquisition,compliance with and maintenance of certain permits or other approvals to conduct regulated activities, (ii) imposetechnology requirements or standards on our operations, (iii) restrict the amounts and types of substances that may bedischarged or emitted into the environment, (iv) limit or prohibit construction or timbering activities in sensitive areas suchas wetlands or areas inhabited by endangered or threatened species, (v) govern worker health and safety aspects of operations,(vi) require measures to investigate, mitigate or remediate releases of hazardous or other substances from our operations and(vii) impose substantial liabilities, including possible fines and penalties for unpermitted emissions or discharges from ouroperations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil andcriminal penalties, the imposition of investigatory and remedial obligations and the issuance of orders enjoining some or allof our operations in affected areas.Moreover, the global trend in environmental regulation is towards increasingly broad and stringent requirements foractivities that may affect the environment. Any changes in environmental laws and regulations or re‑interpretation ofenforcement policies that result in more stringent and costly requirements could have a material adverse effect on ouroperations and financial position. Although we monitor environmental requirements closely and budget for the expectedcosts, actual future expenditures may be different from the amounts we currently anticipate spending. Moreover, certainenvironmental laws impose strict joint and several liability for costs to clean up and restore sites where pollutants have beendisposed or otherwise spilled or released. We cannot assure you that we will not incur significant costs and liabilities forremediation or damage to property, natural resources or persons as a result of spills or releases from our operations or those ofa third party. Although we believe that our competitors will face similar environmental requirements, other market factorsmay prevent us from passing on any increased costs to our customers. Although we believe that we are in substantialcompliance with existing environmental laws and regulations and that continued compliance with existing requirements willnot materially adversely affect us, there is no assurance that the current levels of regulation will continue in the future.The following summarizes some of the more significant existing environmental, health and safety laws andregulations applicable to our operations, the failure to comply with which could have a material adverse impact on ourcapital expenditures, results of operations and financial position.Air EmissionsThe Clean Air Act, as amended (the “CAA”), and state and local laws and regulations that implement and add toCAA requirements, regulate the emission of air pollutants from our facilities. The CAA imposes significant monitoring,recordkeeping and reporting requirements for these emissions. These laws and regulations require us to obtain pre‑approvalfor the construction or modification of certain projects or facilities expected to produce or significantly increase airemissions, obtain and strictly comply with stringent air permits, and in certain cases utilize specific equipment ortechnologies to control and measure emissions. Obtaining these permits can be both costly and time intensive and has thepotential to delay the opening of new plants or the significant expansion of existing plants.The CAA requires that we obtain various construction and operating permits, including, in some cases, Title V airpermits. In certain cases, the CAA requires us to incur capital expenditures to install air pollution control devices at ourfacilities. We are also required to control fugitive emissions from our operations and may face fines, penalties or injunctiveorders in connection with fugitive emissions from our operations. We have incurred, and expect to continue to incur,substantial administrative, operating and capital expenditures to maintain compliance with CAA requirements that havebeen promulgated or may be promulgated or revised in the future.15 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsClimate Change and Greenhouse GasesIn response to findings that emissions of carbon dioxide, methane and GHGs present an endangerment to publichealth and the environment, the U.S. Environmental Protection Agency (the “EPA”) has adopted regulations under existingprovisions of the CAA that require a reduction in emissions of GHGs from motor vehicles and certain stationary sources. Atthis time, the EPA requires biomass facilities with GHG emissions above 75,000 tons per year that are otherwise subject toCAA permitting to undergo CAA permitting for their GHG emissions. Any other legislation or regulations that requirepermitting or reporting of GHG emissions or limit such emissions from our equipment and operations or from biomass‑firedpower plants operated by our customers could require us to incur costs to reduce such emissions or negatively impactdemand for wood pellets. Furthermore, scientists have concluded that increasing concentrations of GHGs in the earth’satmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity ofstorms, floods and other climatic events. If any such effects were to occur, they could have an adverse effect on ouroperations.Water DischargesThe Federal Water Pollution Control Act, as amended (the “Clean Water Act”), as well as state laws and regulationsthat implement, and may be more stringent than, the Clean Water Act, restrict the discharge of pollutants into waters of theUnited States. Any such discharge of pollutants must be performed in accordance with the terms of a permit issued by theEPA or the implementing state agency. In addition, the Clean Water Act and implementing state laws and regulations requireindividual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities.Federal and state regulatory agencies can impose administrative, civil and criminal penalties for non‑compliance withdischarge permits or other requirements of the Clean Water Act and analogous state laws and regulations. These permitsgenerally have a term of five years. Although our facilities are presently in compliance with these requirements, changes tothe terms and conditions of our permits in future renewals or new or modified regulations could require us to incur additionalcapital or operating expenditures, which may be material.Pursuant to the Clean Water Act, the EPA has adopted the Discharge of Oil regulation, which requires any person incharge of an onshore facility to report any discharge of a harmful quantity of oil into U.S. navigable waters, adjoiningshorelines or the contiguous zone. A harmful quantity is any quantity of discharged oil that violates state water qualitystandards, causes a film or sheen on the water’s surface or leaves sludge or emulsion beneath the surface. Spills from ourproduction plants that are located along waterways or from our deep‑water marine terminal facilities may result in fines,penalties and obligations to respond to and remediate any such spills.Spill Response and Release ReportingCertain of our facilities are subject to federal requirements to prepare for and respond to spills or releases from tanksand other equipment located at these facilities and provide training to employees on operation, maintenance and dischargeprevention procedures and the applicable pollution control laws. At such facilities, we have developed or will develop SpillPrevention, Control and Countermeasure plans to memorialize our preparation and response plans and will update them on aregular basis. From time to time, these requirements may be made more stringent and may require us to modify our operationsor expand our plans accordingly. The costs of implementing any such modifications or expansion may be significant. Inaddition, in the event of a spill or release, we may incur fines or penalties or incur responsibility for damage to naturalresources, private property or personal injury in addition to obligations to respond to and remediate any such spill or release.Endangered Species ActThe federal Endangered Species Act, as amended (the “ESA”), restricts activities that may affect endangered andthreatened species or their habitats. Although some of our facilities may be located in areas that are designated as habitats forendangered or threatened species, we believe that we are in substantial compliance with the ESA. Some of our suppliers maysource materials from locations that provide habitats for species that are protected under the ESA, which may extend the timerequired to access those areas, or may impose conditions or restrictions on accessing those areas in a way that restricts ouraccess to raw materials. Moreover, as a result of a settlement approved by the U.S.16 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDistrict Court for the District of Columbia on September 9, 2011, the U.S. Fish and Wildlife Service is required to make adetermination regarding the listing of more than 250 species by the end of the agency’s 2017 fiscal year. That processreportedly remains underway. The designation of previously unidentified endangered or threatened species could cause us toincur additional costs or become subject to operating restrictions or bans in the affected areas, which could have an adverseimpact on the availability or price of raw materials.Coastal Area Protection and Wetlands and Navigable Waters Activity RegulationsOur terminals are located in areas that are subject to the various federal and state programs that regulate theconservation and development of coastal resources. At the federal level, the Coastal Zone Management Act (the “CZMA”)was enacted to preserve, protect, develop and, where possible, restore or enhance valuable natural coastal resources of theU.S. coastal zone. The CZMA authorizes and provides grants for state management programs to regulate land and water useand coastal development. Requirements under the CZMA may affect the siting of any new terminals and could impact theexpansion of modification of existing terminal facilities. The CZMA process may result either in delays in obtaining therequired authorizations to construct a new terminal or expand an existing terminal or conditions that may restrict theconstruction or operation of our terminals.In addition to the CZMA, requirements under the Clean Water Act and related federal laws may result in federal orstate regulators imposing conditions or restrictions on our operations or construction activities. For instance, the dredge andfill provisions of the Clean Water Act require a permit to conduct construction activities in protected waters and wetlandsand prohibit unpermitted discharges of fill materials. Likewise, the Rivers and Harbors Act requires permits for theconstruction of certain port structures. We believe that we are in material compliance with these various requirements;however, any delays in obtaining future permits or renewals, or the inclusion of restrictive conditions in such permits, couldadversely affect the cost of, or result in delays to, our operations and the construction of new, or expansion of existing,terminals.Safety and MaintenanceWe are subject to a number of federal and state laws and regulations, including the federal Occupational Safety andHealth Act, as amended (“OSHA”), and comparable state statutes, whose purpose is to protect the health and safety ofworkers. We have a corporate health and safety program that governs the way we conduct our operations at our facilities. Ouremployees receive OSHA training that is appropriate in light of the tasks performed at our facilities and general training onour health and safety plans. Compliance with OSHA and general training is mandatory. We perform preventive and routinemaintenance on all of our manufacturing and deep‑water marine terminaling systems, and make repairs and replacementswhen necessary or appropriate. We also conduct routine and required inspections of those assets in accordance withapplicable regulations. In addition, the OSHA hazard communication standards in the Emergency Planning and CommunityRight‑to‑Know Act and comparable state statutes require that information be maintained concerning hazardous materialsused or produced in our operations and that this information be provided to employees, state and local governmentalauthorities and citizens. Our facilities adhere to National Fire Protection Association (NFPA) standards for combustible dustand incorporate pollution control equipment such as cyclones, baghouses and electrostatic precipitators to minimizeregulated emissions. Our deep‑water marine terminals adhere to Homeland Security/U.S. Coast Guard regulations regardingphysical security and emergency response plans. We continually strive to maintain compliance with applicable air, solidwaste and wastewater regulations; nevertheless, we cannot guarantee that serious accidents will not occur in the future.SeasonalityOur business is affected to some extent by seasonal fluctuations. The cost of producing wood pellets tends to behigher in the winter months because the delivered cost of fiber typically increases with wet weather and our raw materialshave, on average, higher moisture content during this period of the year, resulting in a lower product yield. In addition, lowerambient temperatures increase the cost of drying wood fiber. Seasonality may also impact the availability and pricing oflimited-scope wood pellet purchase and sale transactions. For example, colder periods typically drive increased demand forwood pellets in the heating and industrial markets, which can increase pricing for prompt deliveries, while warmer periodstypically have the opposite effect.17 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPrincipal Executive OfficesWe lease office space for our principal executive offices at 7200 Wisconsin Avenue, Suite 1000, Bethesda,Maryland 20814. The lease expires in June 2024.Available InformationWe file annual, quarterly and current reports and other documents with the SEC under the Securities Exchange Actof 1934 (the “Exchange Act”). You may read and copy any materials we file with the SEC at the SEC’s Public ReferenceRoom at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operations of the Public ReferenceRoom by calling the SEC at (800) SEC‑0330. In addition, the SEC maintains a website at www.sec.gov that contains reportsand other information regarding issuers that file electronically with the SEC.We also make available free of charge our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, CurrentReports on Form 8‑K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of theExchange Act, simultaneously with or as soon as reasonably practicable after filing such materials with, or furnishing suchmaterials to, the SEC, and on or through our website, www.envivabiomass.com. The information on our website, orinformation about us on any other website, is not incorporated by reference into this Annual Report.18 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 1A. RISK FACTORSThere are many factors that could have a material adverse effect on the Partnership’s business, financial condition,results of operations and cash available for distribution. New risks may emerge at any time, and the Partnership cannotpredict those risks or estimate the extent to which they may affect financial performance. Each of the risks described belowcould adversely impact the value of the Partnership’s common units.Risks Inherent in Our BusinessWe may not have sufficient cash from operations following the establishment of cash reserves and payment of costs andexpenses, including cost reimbursements to our General Partner and its affiliates, to enable us to pay quarterlydistributions to our unitholders at our current distribution rate.We may not have sufficient cash each quarter to enable us to pay quarterly distributions at our current distributionrate. The amount of cash we can distribute on our common and subordinated units principally depends upon the amount ofcash we generate from our operations, which fluctuates from quarter to quarter based on the following factors, some of whichare beyond our control:·the volume and quality of products that we are able to produce or source and sell, which could be adverselyaffected by, among other things, operating or technical difficulties at our plants or deep-water marine terminals;·the prices at which we are able to sell our products;·failure of the Partnership’s customers, vendors and shipping partners to pay or perform their contractualobligations to the Partnership;·the creditworthiness of our contract counterparties;·the amount of low‑cost wood fiber that we are able to procure and process, which could be adversely affectedby, among other things, operating or financial difficulties suffered by our suppliers;·changes in the price and availability of natural gas, coal or other sources of energy;·changes in prevailing economic conditions;·our inability to complete acquisitions, including acquisitions from our sponsor, or to realize the anticipatedbenefits of such acquisitions;·inclement or hazardous environmental conditions, including extreme precipitation, temperatures and flooding;·fires, explosions or other accidents;·changes in domestic and foreign laws and regulations (or the interpretation thereof) related to renewable orlow‑carbon energy, the forestry products industry, the international shipping industry or power generators;·changes in the regulatory treatment of biomass in core and emerging markets;·our inability to acquire or maintain necessary permits or rights for our production, transportation or terminalingoperations;·changes in the price and availability of transportation;19 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents·changes in foreign currency exchange or interest rates, and the failure of our hedging arrangements toeffectively reduce our exposure to the risks related thereto;·risks related to our indebtedness;·our failure to maintain effective quality control systems at our production plants and deep‑water marineterminals, which could lead to the rejection of our products by our customers;·changes in the quality specifications for our products that are required by our customers;·labor disputes;·the effects of Brexit on our and our customers’ businesses; and·our ability to borrow funds and access capital markets.In addition, the actual amount of cash we have available for distribution depends on other factors, some of which arebeyond our control, including:·the level of capital expenditures we make;·costs associated with construction projects at our existing facilities and future construction projects;·fluctuations in our working capital needs;·our treatment as a pass‑through entity for U.S. federal income tax purposes;·our debt service requirements and other liabilities;·restrictions contained in our existing or future debt agreements; and·the amount of cash reserves established by our General Partner.The amount of cash we have available for distribution to holders of our units depends primarily on our cash flow and notsolely on profitability, which may prevent us from making cash distributions during periods when we record net income.The amount of cash we have available for distribution depends primarily upon our cash flow, including cash flowfrom reserves and working capital or other borrowings, and not solely on profitability, which will be affected by non‑cashitems. As a result, we may pay cash distributions during periods when we record net losses for financial accounting purposesand may be unable to pay cash distributions during periods when we record net income.Substantially all of our revenues currently are generated under contracts with four customers, and the loss of any of themcould adversely affect our business, financial condition, results of operations, cash flows and ability to make cashdistributions. We may not be able to renew or obtain new and favorable contracts with these customers when our existingcontracts expire, and we may not be able to obtain contracts with new customers, which could adversely affect our revenuesand profitability.Our contracts with Drax, Ørsted, Lynemouth Power and ENGIE will represent substantially all of our sales volumesin 2018. Because we have a small number of customers, we face counterparty concentration risk. The ability of each of ourcustomers to perform its obligations under a contract with us will depend on a number of factors that are beyond our controland may include, among other things, the overall financial condition of the counterparty, the counterparty’s access to capital,the condition of the regional and global power generation industry, continuing20 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsregulatory and economic support for wood pellet‑generated power, spot market pricing trends and general economicconditions. In addition, in depressed market conditions, our customers may no longer need the amount of our products theyhave contracted for or may be able to obtain comparable products at a lower price. If our customers experience a significantdownturn in their business or financial condition, they may attempt to renegotiate, reject or declare force majeure under ourcontracts. Should any counterparty fail to honor its obligations under a contract with us, we could sustain losses, which couldhave a material adverse effect on our business, financial condition, results of operations and cash available for distribution.We may also decide to renegotiate our existing contracts on less favorable terms and/or at reduced volumes in order topreserve our relationships with our customers.Upon the expiration of our off‑take contracts, our customers may decide not to recontract on terms as favorable to usas our current contracts, or at all. For example, our current customers may acquire wood pellets from other providers that offermore competitive pricing or logistics or develop their own sources of wood pellets. Some of our customers could also exittheir current business or be acquired by other companies that purchase wood pellets from other providers. The demand forwood pellets or their prevailing prices at the times at which our current off‑take contracts expire may also render entry intonew long‑term off‑take contracts difficult or impossible.Any reduction in the amount of wood pellets purchased by our customers, renegotiation of our contracts on lessfavorable terms, or our inability to enter into new contracts on economically acceptable terms upon the expiration of ourcurrent contracts could have a material adverse effect on our results of operations, business and financial position, as well asour ability to pay distributions to our unitholders.Termination penalties within our off‑take contracts may not fully compensate us for our total economic losses.Certain of our off‑take contracts provide the customer with a right of termination for various events of convenienceor changes in law or policy. Although some of these contracts are subject to certain protective termination payments, thetermination payments made by our customers may not fully compensate us for losses resulting from a termination by suchcounterparty. In each case, we may be unable to re‑contract our production at favorable prices or at all, and our results ofoperations, business and financial position, and our ability to make cash distributions to our unitholders may be materiallyadversely affected as a result.We derive substantially all of our revenues from customers in Europe. If we fail to diversify our customer basegeographically in the future, our results of operations, business and financial position and ability to make cashdistributions could be materially adversely affected.Substantially all of our revenues currently are derived from customers in Europe, and our revenues have beenheavily dependent on developments in the European markets. If economic, political, regulatory or financial marketconditions in Europe deteriorate, including as a result of weakness in European economies, our customers may respond bysuspending, delaying or reducing their expenditures and may attempt to renegotiate, reject or declare force majeure under ourcontracts. Our failure to successfully penetrate markets outside of Europe in the future could have a material adverse effect onour results of operations, business and financial position, and our ability to pay distributions to our unitholders.The actions of certain special interest groups could adversely impact our business.Certain special interest groups that focus on environmental issues have expressed their opposition to the use ofbiomass for power generation, both publicly and directly to domestic and foreign regulators, policy makers, power generatorsand other industrial users of biomass. These groups are also actively lobbying, litigating and undertaking other actionsdomestically and abroad in an effort to increase the regulation of, reduce or eliminate the incentives and support for, orotherwise delay, interfere with or impede the production and use of biomass for power generation. Such efforts, if successful,could materially adversely affect our results of operations, business and financial condition, and our ability to make cashdistributions to our unitholders.21 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur exposure to risks associated with foreign currency and interest rate fluctuations, as well the hedging arrangements wemay enter into to mitigate those risks, could have an adverse effect on our financial condition and results of operations.We may experience foreign currency exchange and interest rate volatility in operating our business. We began touse hedging transactions in 2016 with respect to certain of our off‑take contracts which are, in part or in whole, denominatedin British Pound Sterling (“GBP”), as well as an interest rate swap with respect to a portion of our variable rate debt, in aneffort to achieve more predictable cash flow and to reduce our exposure to foreign currency exchange and interest ratefluctuations. We currently do not hedge a significant portion of our overall revenue pursuant to our off‑take contracts.Fluctuations in foreign currency exchange rates could be material to us depending upon, among other things, thecurrency denominations of our off‑take contracts. In particular, we will in the future have exposure to fluctuations in foreigncurrency exchange rates between the U.S. Dollar and the GBP as sales under the EVA‑MGT Contract or the 95,000 MTPYcontract with the First Hancock JV, which commence in 2019 and 2020, respectively, are denominated in GBP from 2020onward and sales under the Lynemouth Power Contract, which commenced in 2017, are denominated in U.S. Dollars andGBP. Although the use of hedging transactions limits our downside risk, their use may also limit future revenues.In addition, there may be instances in which costs and revenue will not be matched with respect to currencydenomination. As a result, to the extent that existing and future off‑take contracts are not denominated in U.S. Dollars, it ispossible that increasing portions of revenue, costs, assets and liabilities will be subject to fluctuations in foreign currencyvaluations.Our hedging transactions involve cost and risk and may not be effective at mitigating our exposure to fluctuationsin foreign currency exchange and interest rates. Risks inherent in our hedging transactions include the risk thatcounterparties to derivative contracts may be unable to perform their obligations and the risk that the terms of suchinstruments will not be legally enforceable. Likewise, our hedging activities may be ineffective or may not offset more than aportion of the financial impact resulting from foreign currency exchange or interest rates fluctuations, which could have amaterial adverse effect on our results of operations, business and financial position, and our ability to pay distributions to ourunitholders.Challenges to or delays in the issuance of air permits could impair our ability to expand production.Our pellet production facilities are subject to the requirements of the CAA and must either receive minor sourcepermits from the states in which they are located or a major source permit, which is subject to the approval of the EPA. Ingeneral, our facilities are eligible for minor source permits following the application of pollution control technologies.However, should we be subject to any challenges to the issuance of our permits, we could experience substantial delays inthe issuance of our permits, which could impair our ability to expand our production capacity. In addition, any new airpermits we receive could require that we incur additional expenses to install emissions control technologies or limitoperations to satisfy emission limitations. Changes in laws or government policies, incentives and taxes implemented to support increased generation of or otherwiseregulate low‑carbon and renewable energy may affect customer demand for our products.Consumers of utility‑grade wood pellets currently use our products either as part of a binding obligation to generatea certain percentage of low‑carbon energy or because they receive direct or indirect financial support or incentives to do so.Financial support is often necessary to cover the generally higher costs of wood pellets compared to conventional fossil fuelslike coal. In most countries, once the government implements a tax (e.g., the United Kingdom’s carbon price floor tax) or apreferable tariff or a specific renewable energy policy either supporting a renewable energy generator or the energygenerating sector as a whole, such tax, tariff or policy is guaranteed for a specified period of time, sometimes for theinvestment lifetime of any electricity generator’s project. However, governmental policies that22 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentscurrently support the use of biomass may modify their tax, tariff or incentive regimes, and the future availability of suchtaxes, tariffs or policies, either in current jurisdictions beyond the prescribed timeframes or in new jurisdictions, is uncertain.Demand for wood pellets could be substantially lower than expected if government support is reduced or delayed or, in thefuture, is insufficient to enable successful deployment of biomass power to the levels currently projected. In addition,regulatory changes such as new requirements to install additional pollution control technology or curtail operations to meetnew GHG emission limits may also affect demand for our products.In Europe, the European Union’s Renewable Energy Directive (“RED”) requires that it fulfill 20% of its energydemand from renewable sources by 2020. Under the current RED framework, biofuels are subject to a set of sustainabilitycriteria that must be met in order to qualify as renewable fuels. The European Union is currently in the process of finalizing asecond Renewable Energy Directive (“RED II”) that seeks to increase the renewable energy goal to 27% of energy demandby 2030. Under the RED II proposal, qualifying biofuels would be subject to new sustainability requirements, including arequirement that biofuel feedstocks be harvested from areas with increasing carbon stocks. The finalization of theserequirements could cause us to incur additional compliance costs. Moreover, there can be no guarantee that the final versionof RED II will be favorable to biomass producers in the United States. Finally, any actions the European Union takes toregulate biofuels may influence future regulatory actions in other countries where our customers are located. In the event thatRED II limits or otherwise constrains our ability to export our product to the European Union or has other adverseconsequences, it could have a material adverse effect on our results of operations and financial condition.In the United States, on October 16, 2017, the EPA proposed a rule to repeal the Clean Power Plan (the “CPP”), theObama Administration’s rule establishing carbon pollution standards for existing power plants. Under the proposal, the CPP—which is currently subject to a judicial stay issued by the U.S. Supreme Court—would be repealed. The current repealproposal suggests that the EPA has yet to determine when or whether it might promulgate new GHG emissions standards forexisting power plants. At this time, it is not clear what impact the repeal of the CPP and any future rulemaking will have onthe demand for biomass in the United States. Also, almost half of U.S. states, either individually or through multi‑stateregional initiatives, have begun to address GHG emissions, primarily through the planned development of GHG emissioninventories and/or regional GHG cap‑and‑trade programs. Although neither the U.S. Congress nor the states in which ourfacilities are located have adopted such legislation at this time, they may do so in the future. The adoption of a differentapproach to the treatment of biogenic carbon in the United States could be treated as precedential by European regulatorsand impact the regulatory treatment of our product in our primary markets.Moreover, many nations have agreed to limit emissions of GHGs pursuant to the United Nations FrameworkConvention on Climate Change and more recently, in December 2015, 195 countries met in Paris, France to approve alandmark climate accord. On November 4, 2016, the Paris Agreement entered into force, potentially providing additionalincentives for participating countries to reduce their GHG emissions. While the Trump Administration has signaled its intentto withdraw from the Paris Agreement, substantially all of our current customers are located in countries that have agreed tobe bound by the Paris Agreement. Although it is not possible at this time to accurately estimate how potential future laws orregulations addressing GHG emissions would impact our business, any such future laws or implementing regulations couldrequire us to incur increased operating or maintenance costs, which, in turn, could have a material adverse effect on ourbusiness, financial condition and results of operations.The international nature of our business subjects us to a number of risks, including foreign exchange risk and unfavorablepolitical, regulatory and tax conditions in foreign countries.Substantially all of our current product sales are to customers that operate outside of the United States. As a result,we face certain risks inherent in maintaining international operations that include, but are not limited to, the following:·foreign exchange movements, which may make it more difficult for our customers to make paymentsdenominated in U.S. Dollars or exert pricing pressure on new contracts compared to competitors that source in aweaker currency;23 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents·restrictions on foreign trade and investment, including currency exchange controls imposed by or in othercountries; and·trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses, which couldincrease the prices of our products and make our products less competitive in some countries.Our business in foreign countries requires us to respond to rapid changes in market conditions in these countries.Our overall success as a global business depends, in part, on our ability to succeed under differing legal, regulatory,economic, social and political conditions. There can be no assurance, however, that we will be able to develop, implementand maintain policies and strategies that will be effective in each location where our customers operate. Any of the foregoingfactors could have a material adverse effect on our results of operations, business and financial position, and our ability topay distributions to our unitholders.Federal, state and local legislative and regulatory initiatives relating to forestry products and the potential for relatedlitigation could result in increased costs, additional operating restrictions or delays for our suppliers and customers,respectively, which could cause a decline in the demand for our products and negatively impact our business, financialcondition and results of operations.Currently, our raw materials are byproducts of traditional timber harvesting, principally the tops and limbs of trees,as well as other low‑value wood materials that are generated in a harvest and industrial residuals (chips, sawdust and otherwood industry byproducts). Commercial forestry is regulated by complex regulatory frameworks at each of the federal, stateand local levels. Among other federal laws, the Clean Water Act and the Endangered Species Act have been applied tocommercial forestry operations through agency regulations and court decisions, as well as through the delegation to states toimplement and monitor compliance with such laws. State forestry laws, as well as land-use regulations and zoning ordinancesat the local level, are also used to manage forests in the Southeastern United States, as well as other regions from which wemay need to source raw materials in the future. Any new or modified laws or regulations at any of these levels could have theeffect of reducing forestry operations in areas where we procure our raw materials and consequently may prevent us frompurchasing raw materials in an economic manner, or at all. In addition, future regulation of, or litigation concerning, the useof timberlands, the protection of endangered species, the promotion of forest biodiversity, and the response to and preventionof wildfires, as well as litigation, campaigns or other measures advanced by environmental activist groups, could also reducethe availability of the raw materials required for our operations.The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reducethe effect of foreign currency, interest rate, and other risks associated with our business.The Dodd‑Frank Wall Street Reform and Consumer Protection Act (“Dodd‑Frank Act”) enacted on July 21, 2010,established federal oversight and regulation over the derivatives markets and entities, such as us, that participate in suchmarkets. The Dodd‑Frank Act requires the Commodities Futures Trading Commission (“CFTC”) and the SEC to promulgaterules and regulations implementing the Dodd‑Frank Act. Although the CFTC has finalized certain regulations, others remainto be finalized or implemented and it is not possible at this time to predict when this will be accomplished.The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing and theassociated rules also require us, in connection with covered derivative activities, to comply with clearing andtrade‑execution requirements or take steps to qualify for an exemption to such requirements. We do not utilize credit defaultswaps and we qualify for, and expect to continue to qualify for, the end‑user exception from the mandatory clearingrequirements for swaps entered to hedge our interest rate risks. Pursuant to the Dodd‑Frank Act, however, the CFTC or federalbanking regulators may require the posting of collateral with respect to uncleared interest rate derivative transactions.Certain banking regulators and the CFTC have recently adopted final rules establishing minimum marginrequirements for uncleared swaps. Although we qualify for the end‑user exception from such margin requirements for swapsentered into to hedge our commercial risks, the application of such requirements to other market participants, such24 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsas swap dealers, may change the cost and availability of the swaps that we use for hedging. Moreover, if any of our swaps donot qualify for the commercial end‑user exception, we may be required to post additional cash margin or collateral, whichcould impact our liquidity and reduce our ability to use cash for capital expenditures or other partnership purposes.The full impact of the Dodd‑Frank Act and related regulatory requirements upon our business will not be knownuntil the regulations are implemented and the market for derivatives contracts has adjusted. The Dodd‑Frank Act andregulations could significantly increase the cost of derivative contracts, materially alter the terms of derivative contracts,reduce the availability of derivatives to protect against risks we encounter, or reduce our ability to monetize or restructureour existing derivative contracts. If we reduce our use of derivatives as a result of the Dodd‑Frank Act and regulationsimplementing the Dodd‑Frank Act our results of operations may become more volatile and our cash flows may be lesspredictable, which could materially adversely affect our ability to plan for and fund capital expenditures.In addition, the European Union and other non‑U.S. jurisdictions are implementing regulations with respect to thederivatives market. To the extent we transact with counterparties in foreign jurisdictions, we may become subject to suchregulations. At this time, the impact of such regulations on us is uncertain.The vote by the United Kingdom to leave the European Union could adversely affect our results of operations, business andfinancial position and ability to make cash distributions.In March 2017, the Prime Minister of the United Kingdom (“U.K.”) formally notified the European Counsel of thecommencement of the process by which the United Kingdom will exit (“Brexit”) from the European Union under Article 50of the Treaty of the European Union. This notification began a two-year period pursuant to which the U.K. and the remainingEuropean Union Member States will negotiate a withdrawal agreement. The United Kingdom is scheduled to withdraw fromthe European Union in March 2019.We have take‑or‑pay off‑take contracts with utilities and large power generators in the United Kingdom and in otherEuropean markets. For the year ended December 31, 2017, approximately 66% of our product sales were derived fromcontracts with customers in the United Kingdom and 34% of our product sales were derived from contracts with customers inother European markets.Brexit may create uncertainty with respect to the legal and regulatory requirements to which we and our customersin the United Kingdom are subject and lead to divergent national laws and regulations as the United Kingdom governmentdetermines which European Union laws to replace or replicate. The absence of precedent for an exit of a European MemberState from the European Union means that it is unclear how the access of United Kingdom businesses to the European UnionSingle Market and how the legal and regulatory environments in the United Kingdom and the European Union could beimpacted by Brexit, and ultimately how Brexit could impact our business or that of our customers.The consequences of Brexit, together with what may be protracted negotiations around the terms of Brexit, couldalso introduce significant uncertainties into global financial markets and adversely impact the markets in which we and ourcustomers operate. For example, prolonged exchange rate volatility or weakness of the local currencies of our customersrelative to the U.S. Dollar may impair the purchasing power of our customers and cause them to default on payment or seekmodification of the terms of our off‑take contracts. The impacts of Brexit may also adversely affect our ability to re‑negotiateour existing contracts on terms acceptable to us as they expire or enter into new contracts with new or existing customers.These uncertainties surrounding Brexit and risks associated with the commencement of Brexit could have a materialadverse effect on our operations, business and financial position, as well as our ability to pay distributions to our unitholders.25 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe viability of our customers’ businesses may also affect demand for our products and the results of our business andoperations.The viability of our customers’ businesses is dependent on their ability to compete in their respective electricity andheat markets. Our customers’ competitiveness is a function of, among other things, the market price of electricity, the marketprice of competing fuels (e.g. coal and natural gas), the relative cost of carbon and the costs of generating heat or electricityusing other renewable energy technologies. Changes in the values of the inputs and outputs of our customers’ businesses, orof the businesses of their competitors, could have a material adverse effect on our customers and, as a result, could have amaterial adverse effect on our results of operations, business and financial position, and our ability to pay distributions to ourunitholders.The growth of our business depends in part upon locating and acquiring interests in additional production plants anddeep‑water marine terminals at favorable prices.Our business strategy includes growing our business through drop‑down and third‑party acquisitions that increaseour cash generated from operations and cash available for distribution on a per unit basis. Various factors could affect theavailability of attractive projects to grow our business, including:·our sponsor’s failure to complete its or the Hancock JVs’ development projects in a timely manner or at all,which could result from, among other things, permitting challenges, failure to procure the requisite financing orequipment, construction difficulties or an inability to obtain an off‑take contract on acceptable terms;·our sponsor’s failure to offer its assets or the assets of the Hancock JVs for sale;·our failure or inability to exercise our right of first offer with respect to any asset that our sponsor offers, orcompels the Hancock JVs to offer, to us; and·fewer third‑party acquisition opportunities than we expect, which could result from, among other things,available projects having less desirable economic returns, competition, anti‑trust concerns or higher risk profilesthan we believe suitable for our business plan and investment strategy.Any of these factors could prevent us from executing our growth strategy or otherwise could have a material adverseeffect on our results of operations, business and financial position, and our ability to pay distributions to our unitholders.Any acquisitions we make may reduce, rather than increase, our cash generated from operations on a per unit basis.We may consummate acquisitions that we believe will be accretive, but result in a decrease in our cash available fordistribution per unit. Any acquisition involves potential risks, some of which are beyond our control, including, among otherthings:·mistaken assumptions about revenues and costs, including synergies;·the inability to successfully integrate the businesses we acquire;·the inability to hire, train or retain qualified personnel to manage and operate our business and newly acquiredassets;·the assumption of unknown liabilities;·limitations on rights to indemnity from the seller;26 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents·mistaken assumptions about the overall costs of equity or debt;·the diversion of management’s attention to other business concerns;·unforeseen difficulties in connection with operating in new product areas or new geographic areas;·customer or key employee losses at the acquired businesses; and·the inability to meet the obligations in off‑take contracts associated with acquired production plants.If we consummate any future acquisitions, our capitalization and results of operations may change significantly, andunitholders will not have the opportunity to evaluate the economic, financial and other relevant information that we willconsider in determining the application of our funds and other resources.If there are significant increases in the cost of raw materials or our suppliers suffer from operating or financial difficulties,we could generate lower revenue, operating profits and cash flows or lose our ability to meet commitments to ourcustomers.We purchase wood fiber from third‑party landowners and other suppliers for use at our production plants. Ourreliance on third parties to secure wood fiber exposes us to potential price volatility and unavailability of such raw materials,and the associated costs may exceed our ability to pass through such price increases under our contracts with our customers.Further, delays or disruptions in obtaining wood fiber may result from a number of factors affecting our suppliers, includingextreme weather, production or delivery disruptions, inadequate logging capacity, labor disputes, impaired financialcondition of a particular supplier, the inability of suppliers to comply with regulatory or sustainability requirements ordecreased availability of raw materials. In addition, other companies, whether or not in our industry, could procure woodfiber within our procurement areas and adversely change regional market dynamics, resulting in insufficient quantities of rawmaterial or higher prices. Any of these events could increase our operating costs or prevent us from meeting our commitmentsto our customers, and thereby could have a material adverse effect on our results of operations, business and financialposition, and our ability to make distributions to our unitholders.Any interruption or delay in the supply of wood fiber, or our inability to obtain wood fiber at acceptable prices in atimely manner, could impair our ability to meet the demands of our customers and expand our operations, which could havea material adverse effect on our results of operations, business and financial position, and our ability to make distributions toour unitholders.We are exposed to the credit risk of our contract counterparties, including the customers for our products, and anymaterial nonpayment or nonperformance by our customers could adversely affect our financial results and cash availablefor distribution.We are subject to the risk of loss resulting from nonpayment or nonperformance by our contract counterparties,including our long-term off-take customers, whose operations are concentrated in the European power generation industry.Our credit procedures and policies may not be adequate to fully eliminate counterparty credit risk. If we fail to adequatelyassess the creditworthiness of existing or future customers, or if their creditworthiness deteriorates unexpectedly, anyresulting unremedied nonpayment or nonperformance by them could have a material adverse effect on our results ofoperations, business and financial position, and our ability to make cash distributions to our unitholders.The satisfactory delivery of substantially all of our production is dependent upon continuous access to infrastructure at ourowned, leased and third‑party-operated ports. Loss of access to our ports of shipment and destination, including throughfailure of port equipment and port closures, could adversely affect our financial results and cash available for distribution.A significant portion of our total production is loaded for shipment utilizing automated conveyor and ship loadingequipment at the Port of Chesapeake, Port of Wilmington, and Port Panama City, and substantially all of our27 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsproduction is dependent upon infrastructure at our owned and third‑party operated ports. Should we suffer a catastrophicfailure of the equipment at these ports or otherwise experience port closures, including for security or weather‑related reasons,we could be unable to fulfill off‑take obligations or incur substantial additional transportation costs, which would reduce ourcash flow. Moreover, we rely on various ports of destination, as well as third parties who provide stevedoring or otherservices at our ports of shipment and destination or from whom we charter oceangoing vessels and crews, to transport ourproduct to our customers. Loss of access to these ports for any reason, or failure of such third‑party service providers touphold their contractual obligations, may impact our ability to fulfill off‑take obligations, cause interruptions to ourshipping schedule, and/or cause us to incur substantial additional transportation or other costs, all of which could have amaterial adverse effect on our business, financial condition and results of operations.Fluctuations in transportation costs and the availability or reliability of shipping, rail or truck transportation couldreduce revenues by causing us to reduce our production or by impairing our ability to deliver products to our customers orthe ability of our customers to take delivery of our products.Disruptions of local or regional transportation services due to shortages of vessels, barges, railcars or trucks,weather‑related problems, flooding, drought, accidents, mechanical difficulties, bankruptcy, strikes, lockouts, bottlenecks orother events could temporarily impair our ability to deliver products to our customers and might, in certain circumstances,constitute a force majeure event under our customer contracts, permitting our customers to suspend taking delivery of andpaying for our products.In addition, persistent disruptions in marine transportation may force us to halt production as we reach storagecapacity at our deep‑water marine terminals. Accordingly, if the transportation services we use to transport our products aredisrupted, and we are unable to find alternative transportation providers, it could have a material adverse effect on our resultsof operations, business and financial position, and our ability to make cash distributions to our unitholders.Our long‑term off‑take contracts with our customers may only partially offset certain increases in our costs or preclude usfrom taking advantage of relatively high wood prices.Our long-term off‑take contracts typically set base prices subject to annual price escalation and other pricingadjustments for changes in certain of our underlying costs of operations, including, in some cases, for stumpage or shippingfuel. However, such cost pass‑through mechanisms may only pass a portion of our total costs through to our customers. If ouroperating costs increase significantly during the terms of our long-term off‑take contracts beyond the levels of pricing andcost protection afforded to us under the terms of such contracts, our results of operations, business and financial position, andability to make cash distributions to our unitholders could be materially adversely affected.Moreover, during periods when the price of wood pellets exceeds the prices under our long-term off-take contracts,our revenues could be significantly lower than they otherwise could have been were we not party to such contracts forsubstantially all of our production. In addition, our current and future competitors may be in a better position than we are totake advantage of relatively high prices during such periods.We may be required to make substantial capital expenditures to maintain and improve our facilities.Although we currently use a portion of our cash reserves and cash generated from our operations to maintain,develop and improve our assets and facilities, such investment may, over time, be insufficient to preserve the operatingprofile required for us to meet our planned profitability or meet the evolving quality and product specifications demanded byour customers. Accordingly, if additional capital expenditures become necessary in the future and we are unable to executeour maintenance or improvement programs successfully and in a timely manner, our results of operations, business andfinancial position, and our ability to make cash distributions to our unitholders, may be materially adversely affected.28 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe compete with other wood pellet producers and, if growth in domestic and global demand for wood pellets meets orexceeds management’s expectations, the competition within our industry may grow significantly.We compete with other wood pellet production companies for the customers to whom we sell our products. Othercurrent producers of utility‑grade wood pellets include AS Graanul Invest, Pinnacle Renewable Energy Inc., DraxBiomass Inc., Georgia Biomass, LLC, Fram Renewable Fuels, LLC, Highland Pellets LLC, Pacific BioEnergy Corporationand The Westervelt Company. Competition in our industry is based on price, consistency and quality of product, sitelocation, distribution and logistics capabilities, customer service, creditworthiness and reliability of supply. Some of ourcompetitors may have greater financial and other resources than we do, may develop technology superior to ours or may haveproduction plants that are sited in more advantageous locations from a transport or other cost perspective.In addition, we expect global demand for solid biomass to increase significantly in the coming years. This demandgrowth may lead to a significant increase in the production levels of our existing competitors and may incentivize new,well‑capitalized competitors to enter the industry, both of which could reduce the demand and the prices we are able toobtain under future off‑take contracts. Significant price decreases or reduced demand could have a material adverse effect onour results of operations, business and financial position, and our ability to pay distributions to our unitholders.For our products to be acceptable to our customers, they must comply with stringent sustainability requirements, whichmay continue to develop and change.Biomass energy generation requires the use of biomass that is derived from acceptable sources and is demonstrablysustainable. This typically is implemented through biomass sustainability criteria, which either are a mandatory element ofeligibility for financial subsidies to biomass energy generators or will become mandatory in the future. As a biomass fuelsupplier, the viability of our business is therefore dependent upon our ability to comply with such requirements. This mayrestrict the types of biomass we can use and the geographic regions from which we source our raw materials, and may requireus to reduce the GHG emissions associated with our supply and production processes. Currently, some elements of the criteriawith which we will have to comply, including rules relating to forest management practices, are not yet finalized. If morestringent sustainability requirements are adopted in the future, demand for our products could be materially reduced incertain markets, and our results of operations, business and financial position, and our ability to make cash distributions toour unitholders, may be materially adversely affected as a result.Our level of indebtedness may increase and reduce our financial flexibility.As of December 31, 2017, our total debt was $401.0 million, which primarily consisted of $352.2 millionoutstanding under the Senior Notes and $43.6 million outstanding under the Senior Secured Credit Facilities. In the future,we may incur additional indebtedness in order to make acquisitions or to develop our properties. Our level of indebtednesscould affect our operations in several ways, including the following:·a significant portion of our cash flows could be used to service our indebtedness;·the covenants contained in the agreements governing our outstanding indebtedness may limit our ability toborrow additional funds, dispose of assets, pay distributions and make certain investments;·our debt covenants may also affect our flexibility in planning for, and reacting to, changes in the economy andin our industry;·a high level of debt would increase our vulnerability to general adverse economic and industry conditions;·a high level of debt may place us at a competitive disadvantage compared to our competitors that may be lessleveraged and therefore may be able to take advantage of opportunities that our indebtedness would prevent usfrom pursuing; and29 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents·a high level of debt may impair our ability to obtain additional financing in the future for working capital,capital expenditures, debt service requirements, acquisitions, general partnership or other purposes.In addition, borrowings under the Senior Secured Credit Facilities bear, and potentially other credit facilities we orour subsidiaries may enter into in the future will bear, interest at variable rates. If market interest rates increase, suchvariable‑rate debt will create higher debt service requirements, which could adversely affect our cash flow.In addition to our debt service obligations, our operations require substantial expenditures on a continuing basis.Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fundcapital and non‑capital expenditures necessary to maintain the condition of our operating assets and properties, as well as toprovide capacity for the growth of our business, depends on our financial and operating performance. General economicconditions and financial, business and other factors affect our operations and our future performance. Many of these factorsare beyond our control. We may not be able to generate sufficient cash flows to pay the interest on our debt, and futureworking capital borrowings or equity financing may not be available to pay or refinance such debt.An increase in the price or a significant interruption in the supply of electricity could have a material adverse effect on ourresults of operations.Our production plants use a substantial amount of electricity. The price and supply of electricity are unpredictableand can fluctuate significantly based on international, political and economic circumstances, as well as other events outsideour control, such as changes in supply and demand due to weather conditions, regional production patterns andenvironmental concerns. In addition, potential climate change regulations or carbon or emissions taxes could result in higherproduction costs for electricity, which may be passed on to us in whole or in part. A significant increase in the price ofelectricity or an extended interruption in the supply of electricity to our production plants could have a material adverseeffect on our results of operations, cash flows and ability to make cash distributions.Changes in the price of diesel fuel may adversely affect our results of operations.Diesel fuel costs generally fluctuate with world crude oil prices, and accordingly are subject to political, economicand market factors that are outside of our control. Our operations are dependent on rolling stock and trucks, and diesel fuelcosts are a significant component of the operating expense of these vehicles. In addition, diesel fuel is consumed by ourwood suppliers in the harvesting and transport of our raw material and is therefore a component of the delivered cost we payfor wood fiber. It is also consumed by the handling equipment at our plants. Some of our off‑take contracts containmechanisms that are intended to reduce the impact that changes in the price of diesel fuel would have on us, but thesemechanisms may not be effective. Accordingly, changes in diesel fuel prices could have an adverse effect on our results ofoperations, cash flows and ability to make cash distributions.Our business may suffer if we lose, or are unable to attract and retain, key personnel.We depend to a large extent on the services of our senior management team and other key personnel. Members ofour senior management and other key employees collectively have extensive expertise in designing, building and operatingwood pellet production plants, negotiating long‑term off‑take contracts and managing businesses such as ours. Competitionfor management and key personnel is intense, and the pool of qualified candidates is limited. The loss of any of theseindividuals or the failure to attract additional personnel, as needed, could have a material adverse effect on our operationsand could lead to higher labor costs or the use of less‑qualified personnel. In addition, if any of our executives or other keyemployees were to join a competitor or form a competing company, we could lose customers, suppliers, know‑how and keypersonnel. Our success is dependent on our ability to continue to attract, employ and retain highly skilled personnel.Failure to maintain effective quality control systems at our production plants and deep‑water marine terminals could havea material adverse effect on our business and operations.Our customers require a reliable supply of wood pellets that meet stringent product specifications. We have built ouroperations and assets to consistently deliver and certify the highest levels of product quality and performance,30 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentswhich is critical to the success of our business. These factors depend significantly on the effectiveness of our quality controlsystems which, in turn, depends on a number of factors. These include the design and efficacy of our quality control systems,the success of our quality training program and our ability to ensure that our employees and third‑party contractors adhere toour quality control policies and guidelines. Any significant failure or deterioration of our quality control systems couldimpact our ability to deliver product that meets our customers’ specifications and, in turn, could lead to rejection of ourproduct by our customers, which could have a material adverse effect on our business, financial condition, and results ofoperations.Our business is subject to operating hazards and other operational risks, which may have a material adverse effect on ourbusiness and results of operation. We may also not be adequately insured against such events.Our business could be adversely affected by operating hazards and other risks to our operations. We produce acombustible product that may under certain circumstances present a risk of fires and explosions or other hazards. Severeweather, such as floods, earthquakes, hurricanes or other natural disasters, climatic phenomena, such as drought, and othercatastrophic events, such as plant or shipping disasters, could impact our operations by causing damage to our facilities andequipment, affecting our ability to deliver our product to our customers and impacting our customers’ ability to take deliveryof our products. Such events may also adversely affect the ability of our suppliers to provide us with the raw materials werequire or the ability of vessels to load, transport and unload our product.We maintain insurance policies to mitigate against certain risks related to our business, in types and amounts thatwe believe are reasonable depending on the circumstances surrounding each identified risk; however, we may not be fullyinsured against all operating hazards and other operational risks incident to our business. Furthermore, we may be unable tomaintain or obtain insurance of the type and amount we desire at reasonable rates, if at all. As a result of market conditionsand certain claims we may make under our insurance policies, premiums and deductibles for certain of our insurance policiescould escalate. In some instances, insurance could become unavailable or available only for reduced amounts of coverage orat unreasonable rates. If we were to incur a significant liability for which we are not fully insured, it could have a materialadverse effect on our financial condition, results of operations and cash available for distribution to our unitholders.Our operations are subject to stringent environmental and occupational health and safety laws and regulations that mayexpose us to significant costs and liabilities.Our operations are subject to stringent federal, regional, state and local environmental, health and safety laws andregulations. These laws and regulations govern environmental protection, occupational health and safety, the release ordischarge of materials into the environment, air emissions, wastewater discharges, the investigation and remediation ofcontaminated sites and allocation of liability for cleanup of such sites. These laws and regulations may restrict or impact ourbusiness in many ways, including by requiring us to acquire permits or other approvals to conduct regulated activities;limiting our air emissions or wastewater discharges or requiring us to install costly equipment to control, reduce or treat suchemissions or discharges; imposing requirements on the handling or disposal of wastes; impacting our ability to modify orexpand our operations (for example, by limiting or prohibiting construction and operating activities in environmentallysensitive areas); and imposing health and safety requirements for worker protection. We may be required to make significantcapital and operating expenditures to comply with these laws and regulations. Failure to comply with these laws andregulations may result in the assessment of administrative, civil and criminal penalties, imposition of investigatory orremedial obligations, suspension or revocation of permits and the issuance of orders limiting or prohibiting some or all of ouroperations. Adoption of new or modified environmental laws and regulations may impair the operation of our business, delayor prevent expansion of existing facilities or construction of new facilities and otherwise result in increased costs andliabilities, which may be material.Our business and operating results are subject to seasonal fluctuations.Our business is affected to some extent by seasonal fluctuations. The cost of producing wood pellets tends to behigher in colder periods because the delivered cost of fiber typically increases with wet weather and our raw materials have,on average, higher moisture content during such period, resulting in a lower product yield. In addition, lower ambienttemperatures increase the cost of drying wood fiber. Seasonality may also impact the availability and pricing of31 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentslimited-scope wood pellet purchase and sale transactions. For example, colder periods typically drive increased demand forwood pellets in the heating and industrial markets, which can increase pricing for prompt deliveries, while warmer periodstypically have the opposite effect. While our contracts generally call for ratable deliveries throughout the year, we are partyto one contract that calls for a higher percentage of deliveries during the first and fourth calendar quarters. These seasonalfluctuations could have an adverse effect on our business, financial condition and results of operations and causecomparisons of operating measures between consecutive quarters may not be as meaningful as comparisons between longerreporting periods.A terrorist attack or armed conflict could harm our business.Terrorist activities and armed conflicts could adversely affect the U.S. and global economies and could prevent usfrom meeting financial and other obligations or prevent our customers from meeting their obligations to us. We couldexperience loss of business, delays or defaults in payments from customers or disruptions of fuel supplies and markets,including if domestic and global power generators are direct targets or indirect casualties of an act of terror or war. Terroristactivities and the threat of potential terrorist activities and any resulting economic downturn could adversely affect ourresults of operations, impair our ability to raise capital or otherwise adversely impact our ability to realize certain businessstrategies.Risks Related to Our Partnership StructureEnviva Holdings, LP owns and controls our General Partner, which has sole responsibility for conducting our business andmanaging our operations. Our General Partner and its affiliates, including Enviva Holdings, LP, have conflicts of interestwith us and limited duties, and they may favor their own interests to our detriment and that of our unitholders.Enviva Holdings, LP, owns and controls our General Partner and appoints all of the directors of our General Partner.Although our General Partner has a duty to manage us in a manner that it believes is not adverse to our interest, the executiveofficers and directors of our General Partner have a fiduciary duty to manage our General Partner in a manner beneficial to oursponsor. Therefore, conflicts of interest may arise between our sponsor or any of its affiliates, including our General Partner,on the one hand, and us or any of our unitholders, on the other hand. In resolving these conflicts of interest, our GeneralPartner may favor its own interests and the interests of its affiliates over the interests of our common unitholders. Theseconflicts include the following situations, among others:·our General Partner is allowed to take into account the interests of parties other than us, such as our sponsor, inexercising certain rights under our partnership agreement;·neither our partnership agreement nor any other agreement requires our sponsor to pursue a business strategythat favors us;·our partnership agreement eliminates and replaces the fiduciary duties that would otherwise be owed by ourGeneral Partner with contractual standards governing its duties, limits our General Partner’s liabilities andrestricts the remedies available to our unitholders for actions that, without such eliminations and limitations,might constitute breaches of fiduciary duty;·except in limited circumstances, our General Partner has the power and authority to conduct our businesswithout unitholder approval;·our General Partner determines the amount and timing of asset purchases and sales, borrowings, issuances ofadditional partnership securities and the level of reserves, each of which can affect the amount of cash that isdistributed to our unitholders;·our General Partner determines the amount and timing of any cash expenditure and whether an expenditure isclassified as a maintenance capital expenditure, which reduces operating surplus, or an expansion capital32 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsexpenditure, which does not reduce operating surplus. This determination can affect the amount of cash fromoperating surplus that is distributed to our unitholders which, in turn, may affect the ability of the subordinatedunits to convert into common units;·our General Partner may cause us to borrow funds in order to permit the payment of cash distributions;·our partnership agreement permits us to distribute up to $39.3 million as operating surplus, even if it isgenerated from asset sales, borrowings other than working capital borrowings or other sources that wouldotherwise constitute capital surplus. This cash may be used to fund distributions on our subordinated units orthe incentive distribution rights;·our General Partner determines which costs incurred by it and its affiliates are reimbursable by us;·our partnership agreement does not restrict our General Partner from causing us to pay it or its affiliates for anyservices rendered to us or entering into additional contractual arrangements with its affiliates on our behalf;·our General Partner intends to limit its liability regarding our contractual and other obligations;·our General Partner may exercise its right to call and purchase common units if it and its affiliates own morethan 80% of the common units;·our General Partner controls the enforcement of obligations that it and its affiliates owe to us;·our General Partner decides whether to retain separate counsel, accountants or others to perform services for us;and·our General Partner may elect to cause us to issue common units to it in connection with a resetting of the targetdistribution levels related to our General Partner’s incentive distribution rights without the approval of theconflicts committee of the board of directors of our General Partner or the unitholders. This election may resultin lower distributions to the common unitholders in certain situations.In addition, we may compete directly with our sponsor and entities in which it has an interest for acquisitionopportunities and potentially will compete with these entities for new business or extensions of the existing servicesprovided by us.The board of directors of our General Partner may modify or revoke our cash distribution policy at any time at itsdiscretion. Our partnership agreement does not require us to pay any distributions at all.Pursuant to our cash distribution policy, we intend to distribute quarterly at least $0.4125 per unit on all of our unitsto the extent we have sufficient cash after the establishment of cash reserves and the payment of our expenses, includingpayments to our General Partner and its affiliates. However, the board may change such policy at any time at its discretionand could elect not to pay distributions for one or more quarters. Please read Part II, Item 5. “Market for Registrant’s CommonEquity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Cash Distribution Policy.”In addition, our partnership agreement does not require us to pay any distributions at all. Accordingly, investors arecautioned not to place undue reliance on the permanence of such a policy in making an investment decision. Anymodification or revocation of our cash distribution policy could substantially reduce or eliminate the amounts ofdistributions to our unitholders. The amount of distributions we make, if any, and the decision to make any distribution at allwill be determined by the board of directors of our General Partner, whose interests may differ from those of our commonunitholders. Our General Partner has limited duties to our unitholders, which may permit it to favor its own interests or theinterests of our sponsor to the detriment of our common unitholders.33 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur General Partner limits its liability regarding our obligations.Our General Partner limits its liability under contractual arrangements between us and third parties so that thecounterparties to such arrangements have recourse only against our assets, and not against our General Partner or its assets.Our General Partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our GeneralPartner. Our partnership agreement provides that any action taken by our General Partner to limit its liability is not a breachof our General Partner’s duties, even if we could have obtained more favorable terms without the limitation on liability. Inaddition, we are obligated to reimburse or indemnify our General Partner to the extent that it incurs obligations on our behalf.Any such reimbursement or indemnification payments would reduce the amount of cash otherwise available for distributionto our unitholders.We intend to distribute a significant portion of our cash available for distribution to our partners, which could limit ourability to grow and make acquisitions.We intend to distribute most of our cash available for distribution, which may cause our growth to proceed at aslower pace than that of businesses that reinvest their cash to expand ongoing operations. To the extent we issue additionalunits in connection with any acquisitions or expansion capital expenditures, the payment of distributions on thoseadditional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There areno limitations in our partnership agreement on our ability to issue additional units, including units ranking senior to thecommon units. The incurrence of additional commercial borrowings or other debt to finance our growth strategy would resultin increased interest expense, which, in turn, may impact the cash that we have available to distribute to our unitholders.Our partnership agreement eliminates and replaces our General Partner’s fiduciary duties to holders of our units.Our partnership agreement contains provisions that eliminate and replace the fiduciary standards to which ourGeneral Partner would otherwise be held by state fiduciary duty law. For example, our partnership agreement permits ourGeneral Partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our General Partner,or otherwise free of fiduciary duties to us and our unitholders. This entitles our General Partner to consider only the interestsand factors that it desires and relieves it of any duty or obligation to give any consideration to any interest of, or factorsaffecting, us, our affiliates or our limited partners. Examples of decisions that our General Partner may make in its individualcapacity include:·how to allocate business opportunities among us and its affiliates;·whether to exercise its call right;·whether to seek approval of the resolutions of a conflict of interest by the conflicts committee of the board ofdirectors of our General Partner;·how to exercise its voting rights with respect to the units it owns;·whether to exercise its registration rights;·whether to elect to reset target distribution levels; and·whether or not to consent to any merger or consolidation of the partnership or amendment to the partnershipagreement.Limited partners who own common units are treated as having consented to the provisions in the partnershipagreement, including the provisions discussed above.34 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur partnership agreement restricts the remedies available to holders of our units for actions taken by our General Partnerthat might otherwise constitute breaches of fiduciary duty.Our partnership agreement contains provisions that restrict the remedies available to unitholders for actions takenby our General Partner that might otherwise constitute breaches of fiduciary duty under state fiduciary duty law. For example,our partnership agreement provides that:·whenever our General Partner makes a determination or takes, or declines to take, any other action in itscapacity as our General Partner, our General Partner is generally required to make such determination, or take ordecline to take such other action, in good faith, and will not be subject to any higher standard imposed by ourpartnership agreement, Delaware law, or any other law, rule or regulation, or at equity;·our General Partner and its officers and directors will not be liable for monetary damages or otherwise to us orour limited partners resulting from any act or omission unless there has been a final and non‑appealablejudgment entered by a court of competent jurisdiction determining that such losses or liabilities were the resultof conduct in which our General Partner or its officers or directors engaged in bad faith, meaning that theybelieved that the decision was adverse to the interest of the partnership or, with respect to any criminal conduct,with knowledge that such conduct was unlawful; and·our General Partner will not be in breach of its obligations under the partnership agreement or its duties to us orour limited partners if a transaction with an affiliate or the resolution of a conflict of interest is:(1)approved by the conflicts committee of the board of directors of our General Partner, although our GeneralPartner is not obligated to seek such approval; or(2)approved by the vote of a majority of the outstanding common units, excluding any common units ownedby our General Partner and its affiliates.In connection with a situation involving a transaction with an affiliate or a conflict of interest, other than one whereour General Partner is permitted to act in its sole discretion, any determination by our General Partner must be made in goodfaith. If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or theconflicts committee then it will be presumed that, in making its decision, taking any action or failing to act, the board ofdirectors acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the partnership, theperson bringing or prosecuting such proceeding will have the burden of overcoming such presumption.Our sponsor and other affiliates of our General Partner may compete with us.Our partnership agreement provides that our General Partner is restricted from engaging in any business activitiesother than acting as our General Partner, engaging in those activities incidental to its ownership interest in us and providingmanagement, advisory and administrative services to its affiliates or to other persons. However, affiliates of our GeneralPartner, including our sponsor, are not prohibited from engaging in other businesses or activities, including those that mightbe in direct competition with us. In addition, our sponsor may compete with us for investment opportunities and may own aninterest in entities that compete with us.Pursuant to the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine,does not apply to our General Partner or any of its affiliates, including its executive officers and directors and our sponsor.Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may bean opportunity for us will not have any duty to communicate or offer such opportunity to us. Any such person or entity willnot be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that suchperson or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or doesnot communicate such opportunity or information to us. This may create actual and potential conflicts of interest between usand affiliates of our General Partner and result in less than favorable treatment of us and our unitholders.35 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe holder or holders of our incentive distribution rights may elect to cause us to issue common units to it in connectionwith a resetting of the incentive distribution without the approval of our unitholders. This election may result in lowerdistributions to our common unitholders in certain situations.The holder or holders of a majority of our incentive distribution rights (currently our General Partner) have the right,at any time when there are no subordinated units outstanding and we have made cash distributions in excess of thethen‑applicable third target distribution for each of the prior four consecutive fiscal quarters, to reset the initial targetdistribution levels at higher levels based on our cash distribution levels at the time of the exercise of the reset election.Following a reset election, a baseline distribution amount will be calculated equal to an amount equal to the prior cashdistribution per common unit for the fiscal quarter immediately preceding the reset election (such amount is referred to as the“reset minimum quarterly distribution”), and the target distribution levels will be reset to correspondingly higher levelsbased on percentage increases above the reset minimum quarterly distribution.We anticipate that our General Partner would exercise this reset right in order to facilitate acquisitions or internalgrowth projects that would not be sufficiently accretive to cash distributions per unit without such conversion. However, ourGeneral Partner may transfer the incentive distribution rights at any time. It is possible that our General Partner or a transfereecould exercise this reset election at a time when we are experiencing declines in our aggregate cash distributions or at a timewhen the holders of the incentive distribution rights expect that we will experience declines in our aggregate cashdistributions in the foreseeable future. In such situations, the holders of the incentive distribution rights may beexperiencing, or may expect to experience, declines in the cash distributions they receive related to the incentivedistribution rights and may therefore desire to be issued our common units, which are entitled to specified priorities withrespect to our distributions and which therefore may be more advantageous for them to own in lieu of the right to receiveincentive distribution payments based on target distribution levels that are less certain to be achieved. As a result, a resetelection may cause our common unitholders to experience dilution in the amount of cash distributions that they would haveotherwise received had we not issued new common units to the holders of the incentive distribution rights in connection withresetting the target distribution levels.Our general partner has certain incentive distribution rights that reduce the amount of our cash available for distributionto our common unitholders.Our General Partner currently holds incentive distribution rights that entitle it to receive an increasing percentage(15 percent, 25 percent and 50 percent) of the cash that we distribute to our common unitholders from available cash after theminimum quarterly distribution and certain target distribution levels have been achieved. The maximum distribution rightfor our General Partner to receive 50 percent of any distributions paid to our common unitholders does not include anydistributions that our General Partner or its affiliates may receive on common units that they own. Effective as of ourquarterly cash distribution in the fourth quarter of 2017, our General Partner was at the top tier of the incentive distributionrights scale. Given that a higher percentage of our cash flows is allocated to our general partner due to these incentivedistribution rights, it may be more difficult for us to increase the amount of distributions to our unitholders and our cost ofcapital may be higher, making investments, capital expenditures and acquisitions, and therefore, future growth, by uspotentially more costly, and in some cases, potentially prohibitively so.Holders of our common units have limited voting rights and are not entitled to elect our General Partner or its directors,which could reduce the price at which our common units will trade.Compared to the holders of common stock in a corporation, unitholders have limited voting rights and, therefore,limited ability to influence management’s decisions regarding our business. Unitholders have no right on an annual orongoing basis to elect our General Partner or its board of directors. The board of directors of our General Partner, includingthe independent directors, is chosen entirely by our sponsor, as a result of it owning our General Partner, and not by ourunitholders. Unlike publicly traded corporations, we do not hold annual meetings of our unitholders to elect directors orconsider other matters routinely addressed at annual meetings of stockholders of corporations. As a result of these limitations,the price at which the common units trade could be diminished because of the absence or reduction of a takeover premium inthe trading price.36 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsEven if holders of our common units are dissatisfied, they cannot currently remove our General Partner without oursponsor’s consent.If our unitholders are dissatisfied with the performance of our General Partner, they have limited ability to removeour General Partner. Unitholders are currently unable to remove our General Partner without our sponsor’s consent becauseour sponsor and its affiliates own sufficient units to be able to prevent its removal. The vote of the holders of at least 66/3%of all outstanding common and subordinated units voting together as a single class is required to remove our General Partner.As of February 16, 2018, our sponsor owned approximately 50% of our common and subordinated units, taken together. Inaddition, any vote to remove our General Partner during the subordination period must provide for the election of a successorGeneral Partner by the holders of a majority of the common units and a majority of the subordinated units, voting as separateclasses. Both of these conditions provide our sponsor the ability to prevent the removal of our General Partner.Our general partner interest or the control of our General Partner may be transferred to a third party without unitholderconsent.Our General Partner may transfer its general partner interest to a third party without the consent of our unitholders.Furthermore, our partnership agreement does not restrict the ability of the owner of our General Partner to transfer itsmembership interests in our General Partner to a third party. The new owner of our General Partner would then be in aposition to replace the board of directors and executive officers of our General Partner with its own designees and therebyexert significant control over the decisions taken by the board of directors and executive officers of our General Partner. Thiseffectively permits a “change of control” without the vote or consent of the unitholders.The incentive distribution rights may be transferred to a third party without unitholder consent.Our General Partner may transfer the incentive distribution rights to a third party at any time without the consent ofour unitholders. If our General Partner transfers the incentive distribution rights to a third party, our General Partner wouldnot have the same incentive to grow our partnership and increase quarterly distributions to unitholders over time. Forexample, a transfer of incentive distribution rights by our General Partner could reduce the likelihood of our sponsoraccepting offers made by us relating to assets owned by our sponsor, as it would have less of an economic incentive to growour business, which in turn would impact our ability to grow our asset base.Our General Partner has a call right that may require unitholders to sell their common units at an undesirable time orprice.If at any time our General Partner and its affiliates own more than 80% of the common units, our General Partner willhave the right, which it may assign to any of its affiliates or to us, but not the obligation, to acquire all, but not less than all,of the common units held by unaffiliated persons at a price equal to the greater of (1) the average of the daily closing price ofthe common units over the 20 trading days preceding the date three days before notice of exercise of the call right is firstmailed and (2) the highest per‑unit price paid by our General Partner or any of its affiliates for common units during the90‑day period preceding the date such notice is first mailed. As a result, unitholders may be required to sell their commonunits at an undesirable time or price and may not receive any return or a negative return on their investment. Unitholders mayalso incur a tax liability upon a sale of their units. Our General Partner is not obligated to obtain a fairness opinion regardingthe value of the common units to be repurchased by it upon exercise of the call right. There is no restriction in ourpartnership agreement that prevents our General Partner from causing us to issue additional common units and thenexercising its call right. If our General Partner exercised its call right, the effect would be to take us private and, if the unitswere subsequently deregistered, we would no longer be subject to the reporting requirements of the Exchange Act.37 2Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWe may issue additional units without unitholder approval, which would dilute existing unitholder ownership interests.Our partnership agreement does not limit the number of additional limited partner interests we may issue at any timewithout the approval of our unitholders. The issuance of additional common units or other equity interests of equal or seniorrank will have the following effects:·our existing unitholders’ proportionate ownership interest in us will decrease;·the amount of cash available for distribution on each unit may decrease;·because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in thepayment of the minimum quarterly distribution will be borne by our common unitholders will increase;·the ratio of taxable income to distributions may increase;·the relative voting strength of each previously outstanding unit may be diminished; and·the market price of the common units may decline.There are no limitations in our partnership agreement on our ability to issue units ranking senior to the common units.In accordance with Delaware law and the provisions of our partnership agreement, we may issue additionalpartnership interests that are senior to the common units in right of distribution, liquidation and voting. The issuance by usof units of senior rank may (i) reduce or eliminate the amount of cash available for distribution to our common unitholders;(ii) diminish the relative voting strength of the total common units outstanding as a class; or (iii) subordinate the claims ofthe common unitholders to our assets in the event of our liquidation.The market price of our common units could be adversely affected by sales of substantial amounts of our common units inthe public or private markets, including sales by our sponsor or other large holders.All of the subordinated units will convert into common units on a one‑for‑one basis at the end of the subordinationperiod, which is expected to occur in May 2018. Our sponsor has registration rights with respect to the common units itcurrently holds and the common units it will hold upon conversion of the subordinated units. Sales by our sponsor or otherlarge holders of a substantial number of our common units in the public markets, or the perception that such sales mightoccur, could have a material adverse effect on the price of our common units or could impair our ability to obtain capitalthrough an offering of equity securities.Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units.Our partnership agreement restricts unitholders’ voting rights by providing that any units held by a person or groupthat owns 20% or more of any class of units then outstanding, other than our General Partner and its affiliates, theirtransferees and persons who acquired such units with the prior approval of the board of directors of our General Partner,cannot vote on any matter.Cost reimbursements due to our General Partner and its affiliates for services provided to us or on our behalf will reducecash available for distribution to our unitholders. The amount and timing of such reimbursements will be determined byour General Partner.Under our management services agreement with Enviva Management (the “MSA”), we are obligated to reimburseEnviva Management for all direct or indirect costs and expenses incurred by, or chargeable to, Enviva Management inconnection with its provision of services necessary for the operation of our business. If the MSA were38 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsterminated without replacement, or our General Partner or its affiliates provided services outside of the scope of the MSA, ourpartnership agreement would require us to reimburse our General Partner and its affiliates for all expenses they incur andpayments they make on our behalf. Our partnership agreement does not set a limit on the amount of expenses for which ourGeneral Partner and its affiliates may be reimbursed. These expenses include salary, bonus, incentive compensation and otheramounts paid to persons who perform services for us or on our behalf and expenses allocated to our General Partner by itsaffiliates. Our partnership agreement provides that our General Partner determines the expenses that are allocable to us. Thereimbursement of expenses and payment of fees, if any, to our General Partner and its affiliates will reduce the amount of cashavailable for distribution to our unitholders.The price of our common units may fluctuate significantly and unitholders could lose all or part of their investment.The market price of our common units may be influenced by many factors, some of which are beyond our control,including:·our quarterly distributions;·our quarterly or annual earnings or those of other companies in our industry;·announcements by us or our competitors of significant contracts or acquisitions;·changes in accounting standards, policies, guidance, interpretations or principles;·general economic conditions;·the failure of securities analysts to cover our common units or changes in financial estimates by analysts;·future sales of our common units; and·the other factors described in these “Risk Factors.”Unitholders may have liability to repay distributions.Under certain circumstances, unitholders may have to repay amounts wrongfully returned or distributed to them.Under Section 17‑607 of the Delaware Revised Uniform Limited Partnership Act, we may not make a distribution to ourunitholders if the distribution would cause our liabilities to exceed the fair value of our assets. Delaware law provides that fora period of three years from the date of the impermissible distribution, limited partners who received the distribution and whoknew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distributionamount. Liabilities to partners on account of their partnership interests and liabilities that are non‑recourse to the partnershipare not counted for purposes of determining whether a distribution is permitted.For as long as we are an emerging growth company, we will not be required to comply with certain disclosurerequirements that apply to other public companies.For as long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage ofcertain exemptions from various reporting requirements that are applicable to other public companies that are not emerginggrowth companies, including not being required to provide an auditor’s attestation report on management’s assessment of theeffectiveness of our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes‑Oxley Act andreduced disclosure obligations regarding executive compensation in our periodic reports. We will remain an emerginggrowth company for up to five years, although we will lose that status earlier if we have more than $1.0 billion of revenues ina fiscal year, have more than $700.0 million in market value of our common units held by non‑affiliates, or issue more than$1.0 billion of non‑convertible debt over a three‑year period.To the extent that we rely on any of the exemptions available to emerging growth companies, our unitholders willreceive less information about our executive compensation and internal control over financial reporting than issuers39 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsthat are not emerging growth companies. If some investors find our common units to be less attractive as a result, there maybe a less active trading market for our common units and our trading price may be more volatile.The New York Stock Exchange (the “NYSE”) does not require a publicly traded partnership like us to comply with certainof its corporate governance requirements.Our common units are listed on the NYSE. Because we are a publicly traded partnership, the NYSE does not requireus to have a majority of independent directors on our General Partner’s board of directors or to establish a compensationcommittee or a nominating and corporate governance committee. Accordingly, unitholders do not have the same protectionsafforded to certain corporations that are subject to all of the NYSE corporate governance requirements. Please read Part III,Item 10. “Directors, Executive Officers and Corporate Governance—Director Independence.”Tax Risks to Common UnitholdersOur tax treatment depends on our status as a partnership for federal income tax purposes and not being subject to amaterial amount of entity‑level taxation. If the Internal Revenue Service (“IRS”) were to treat us as a corporation forfederal income tax purposes, or we become subject to entity‑level taxation for state tax purposes, our cash available fordistribution to our unitholders would be substantially reduced.The anticipated after‑tax economic benefit of an investment in our common units depends largely on our beingtreated as a partnership for federal income tax purposes.Despite the fact that we are organized as a limited partnership under Delaware law, we would be treated as acorporation for U.S. federal income tax purposes unless we satisfy a “qualifying income” requirement. Based upon ourcurrent operations, we believe we satisfy the qualifying income requirement. We have requested and obtained a favorableprivate letter ruling from the IRS to the effect that, based on facts presented in the private letter ruling request, our incomefrom processing timber feedstocks into pellets and transporting, storing, marketing and distributing such timber feedstocksand wood pellets constitute “qualifying income” within the meaning of Section 7704 of the Internal Revenue Code of 1986(the “Code”). However, no ruling has been or will be requested regarding our treatment as a partnership for U.S. federalincome tax purposes. Failing to meet the qualifying income requirement or a change in current law could cause us to betreated as a corporation for U.S. federal income tax purposes or otherwise subject us to taxation as an entity.If we were treated as a corporation for federal income tax purposes, we would pay U.S. federal income tax on ourtaxable income at the corporate tax rate. Distributions to our unitholders would generally be taxed again as corporatedistributions, and no income, gains, losses or deductions would flow through to our unitholders. Because a tax would beimposed upon us as a corporation, our cash available for distribution to our unitholders would be substantially reduced.Therefore, treatment of us as a corporation would result in a material reduction in the anticipated cash flow and after‑taxreturn to the unitholders, likely causing a substantial reduction in the value of our common units.Our partnership agreement provides that if a law is enacted or existing law is modified or interpreted in a mannerthat subjects us to taxation as a corporation or otherwise subjects us to entity‑level taxation for U.S. federal, state, local orforeign income tax purposes, the minimum quarterly distribution amount and the target distribution amounts may beadjusted to reflect the impact of that law or interpretation on us. At the state level, several states have been evaluating waysto subject partnerships to entity‑level taxation through the imposition of state income, franchise or other forms of taxation.Specifically, we currently own assets and conduct business in Mississippi, North Carolina, Florida and Virginia, each ofwhich imposes a margin or franchise tax. In the future, we may expand our operations. Imposition of a similar tax on us inother jurisdictions that we may expand to could substantially reduce our cash available for distribution to our unitholders.The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative,judicial or administrative changes or differing interpretations, possibly applied on a retroactive basis.The present U.S. federal income tax treatment of publicly traded partnerships, including us, or an investment in ourcommon units may be modified by administrative, legislative or judicial changes or differing interpretations at any40 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentstime. From time to time, members of Congress propose and consider substantive changes to the existing U.S. federal incometax laws that affect publicly traded partnerships. Although there is no current legislative proposal, a prior legislative proposalwould have eliminated the qualifying income exception to the treatment of all publicly traded partnerships as corporationsupon which we rely for our treatment as a partnership for U.S. federal income tax purposes.In addition, on January 24, 2017, final regulations regarding which activities give rise to qualifying income withinthe meaning of Section 7704 of the Code (the “Final Regulations”) were published in the Federal Register. The FinalRegulations are effective as of January 19, 2017 and apply to taxable years beginning on or after January 19, 2017 and,consistent with our private letter ruling, the Final Regulations generally treat income from the production, transportation andmarketing of wood pellets as qualifying income. However, there can be no assurance that there would not be further changesto the Treasury Department’s interpretation of the qualifying income rules in a manner that could impact our ability toqualify as a partnership for U.S. federal income tax purposes.Any modification to the U.S. federal income tax laws may be applied retroactively and could make it more difficultor impossible for us to meet the exception for certain publicly traded partnerships to be treated as partnerships for U.S. federalincome tax purposes. We are unable to predict whether any of these changes or other proposals will ultimately be enacted.Any such changes could negatively impact the value of an investment in our common units. You are urged to consult withyour own tax advisor with respect to the status of regulatory or administrative developments and proposals and theirpotential effect on your investment in our common units.If the IRS were to contest the federal income tax positions we take, it may adversely impact the market for our commonunits, and the costs of any such contest would reduce cash available for distribution to our unitholders.We have requested and obtained a favorable private letter ruling from the IRS to the effect that, based on factspresented in the private letter ruling request, our income from processing timber feedstocks into pellets and transporting,storing, marketing and distributing such timber feedstocks and wood pellets will constitute “qualifying income” within themeaning of Section 7704 of the Internal Revenue Code. However, no ruling has been or will be requested regarding ourtreatment as a partnership for U.S. federal income tax purposes. The IRS may adopt positions that differ from the positions wetake. It may be necessary to resort to administrative or court proceedings to sustain some or all of the positions we take. Acourt may not agree with some or all of the positions we take. Any contest with the IRS may materially and adversely impactthe market for our common units and the price at which they trade. Moreover, the costs of any contest between us and the IRSwill result in a reduction in cash available for distribution to our unitholders and thus will be borne indirectly by ourunitholders.If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it (and somestates) may assess and collect any taxes (including any applicable penalties and interest) resulting from such auditadjustments directly from us, in which case we may require our unitholders and former unitholders to reimburse us for suchtaxes (including any applicable penalties or interest) or, if we are required to bear such payments, our cash available fordistribution to our unitholders might be substantially reduced.Pursuant to the Bipartisan Budget Act of 2015, for tax years beginning after December 31, 2017, if the IRS makesaudit adjustments to our income tax returns, it (and some states) may assess and collect any taxes (including any applicablepenalties and interest) resulting from such audit adjustment directly from us. To the extent possible under the new rules, ourGeneral Partner may elect to either pay the taxes (including any applicable penalties and interest) directly to the IRS or, if weare eligible, issue a revised information statement to each unitholder and former unitholder with respect to an audited andadjusted return, which statement reports the items adjusted and certain other amounts. Although our General Partner mayelect to have our unitholders and former unitholders take such audit adjustment into account in accordance with theirinterests in us during the tax year under audit, there can be no assurance that such election will be practical, permissible oreffective in all circumstances. As a result, our current unitholders may bear some or all of the tax liability resulting from suchaudit adjustment, even if such unitholders did not own units in us during the tax year under audit. If, as a result of any suchaudit adjustment, we are required to make payments of taxes, penalties and interest, we may require our unitholders andformer unitholders to reimburse us for such taxes (including any applicable penalties or interest) or, if we are required to bearsuch payments, our cash available for distribution to our unitholders might be substantially reduced. These rules are notapplicable for tax years beginning on or prior to December 31, 2017.41 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsEven if unitholders do not receive any cash distributions from us, unitholders will be required to pay taxes on their share ofour taxable income.Unitholders are required to pay federal income taxes and, in some cases, state and local income taxes, onunitholders’ share of our taxable income, whether or not they receive cash distributions from us. For example, if we sell assetsand use the proceeds to repay existing debt or fund capital expenditures, you may be allocated taxable income and gainresulting from the sale, and our cash available for distribution would not increase. Similarly, taking advantage ofopportunities to reduce our existing debt, such as debt exchanges, debt repurchases, or modifications of our existing debtcould result in “cancellation of indebtedness income” being allocated to our unitholders as taxable income without anyincrease in our cash available for distribution. Unitholders may not receive cash distributions from us equal to their share ofour taxable income or even equal to the actual tax due from them with respect to that income.A tax gain or loss on the disposition of our common units could be more or less than unitholders expect.If unitholders sell their common units, they will recognize a gain or loss equal to the difference between the amountrealized and their tax basis in those common units. Because distributions in excess of unitholders’ allocable share of our nettaxable income decrease their tax basis in their common units, the amount, if any, of such prior excess distributions withrespect to the units unitholders sell will, in effect, become taxable income to our unitholders if they sell such units at a pricegreater than their tax basis in those units, even if the price they receive is less than their original cost. In addition, because theamount realized includes a unitholder’s share of our nonrecourse liabilities, if they sell their units, unitholders may incur atax liability in excess of the amount of cash they receive from the sale.Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed asordinary income due to potential recapture items, including depreciation recapture. Thus, you may recognize both ordinaryincome and capital loss from the sale of your units if the amount realized on a sale of your units is less than your adjustedbasis in the units. Net capital loss may only offset capital gains and, in the case of individuals, up to $3,000 of ordinaryincome per year. In the taxable period in which you sell your units, you may recognize ordinary income from our allocationsof income and gain to you prior to the sale and from recapture items that generally cannot be offset by any capital lossrecognized upon the sale of units.Tax‑exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences tothem.Investment in common units by tax‑exempt entities, such as employee benefit plans and individual retirementaccounts (known as IRAs), raises issues unique to them. For example, virtually all of our income allocated to organizationsthat are exempt from federal income tax, including IRAs and other retirement plans, will be unrelated business taxableincome and will be taxable to them. Further, with respect to taxable years beginning after December 31, 2017, a tax-exemptentity with more than one unrelated trade or business (including by attribution from investment in a partnership such as oursthat is engaged in one or more unrelated trade or business) is required to compute the unrelated business taxable income ofsuch tax-exempt entity separately with respect to each such trade or business (including for purposes of determining any netoperating loss deduction). As a result, for years beginning after December 31, 2017, it may not be possible for tax-exemptentities to utilize losses from an investment in our partnership to offset unrelated business taxable income from anotherunrelated trade or business and vice versa. Any tax‑exempt entity should consult their tax advisor before investing in ourcommon units.Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.Historically, we have been entitled to a full deduction for interest paid or accrued on indebtedness properlyallocable to our trade or business during our taxable year. However, under the Tax Cuts and Jobs Act signed into law inDecember 2017, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to thesum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, ouradjusted taxable income is computed without regard to any business interest expense or business interest income, and in thecase of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization or depletion.42 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNon-U.S. Unitholders will be subject to U.S. taxes and withholding with respect to their income and gain from owning ourunits.Non-U.S. unitholders are generally taxed and subject to income tax filing requirements by the United States onincome effectively connected with a U.S. trade or business (“effectively connected income”). Income allocated to ourunitholders and any gain from the sale of our units will generally be considered to be “effectively connected” with a U.S.trade or business. As a result, distributions to a non-U.S. unitholder will be subject to withholding at the highest applicableeffective tax rate and a non-U.S. unitholder who sells or otherwise disposes of a unit will also be subject to U.S. federalincome tax on the gain realized from the sale or disposition of such unit. The Tax Cuts and Jobs Act imposes a withholding obligation of 10% of the amount realized upon a non-U.S.unitholder’s sale or exchange of an interest in a partnership that is engaged in a U.S. trade or business. However, due tochallenges of administering a withholding obligation applicable to open market trading and other complications, the IRS hastemporarily suspended the application of this withholding rule to open market transfers of interests in publicly tradedpartnerships pending promulgation of regulations or other guidance that resolves the challenges. It is not clear if or whensuch regulations or other guidance will be issued. Non-U.S. unitholders should consult a tax advisor before investing in ourcommon units.We treat each purchaser of our common units as having the same tax benefits without regard to the actual common unitspurchased. The IRS may challenge this treatment, which could adversely affect the value of the common units.Because we cannot match transferors and transferees of common units, we have adopted certain methods forallocating depreciation and amortization deductions that may not conform to all aspects of existing Treasury Regulations. Asuccessful IRS challenge to the use of those methods could adversely affect the amount of tax benefits available to ourunitholders. It also could affect the timing of these tax benefits or the amount of gain from our unitholders’ sale of commonunits and could have a negative impact on the value of our common units or result in audit adjustments to their tax returns.We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our units eachmonth based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particularunit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, lossand deduction among our unitholders.We generally prorate our items of income, gain, loss and deduction between transferors and transferees of our unitseach month based upon the ownership of our units on the first day of each month (the “Allocation Date”), instead of on thebasis of the date a particular unit is transferred. Similarly, we generally allocate certain deductions for depreciation of capitaladditions, gain or loss realized on a sale or other disposition of our assets and, in the discretion of the general partner, anyother extraordinary item of income, gain, loss or deduction based upon ownership on the Allocation Date. TreasuryRegulations allow a similar monthly simplifying convention, but such regulations do not specifically authorize all aspects ofour proration method. If the IRS were to challenge our proration method, we may be required to change the allocation ofitems of income, gain, loss and deduction among our unitholders.A unitholder whose units are the subject of a securities loan (e.g., a loan to a “short seller” to cover a short sale of units)may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner withrespect to those units during the period of the loan and may recognize gain or loss from the disposition.Because there are no specific rules governing the U.S. federal income tax consequence of loaning a partnershipinterest, a unitholder whose units are the subject of a securities loan may be considered as having disposed of the loanedunits. In that case, the unitholder may no longer be treated for tax purposes as a partner with respect to those units during theperiod of the loan to the short seller and the unitholder may recognize gain or loss from such disposition. Moreover, duringthe period of the loan, any of our income, gain, loss or deduction with respect to those units may not be reportable by theunitholder and any cash distributions received by the unitholder as to those units could be fully taxable as ordinary income.Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a43 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentssecurities loan are urged to consult a tax advisor to determine whether it is advisable to modify any applicable brokerageaccount agreements to prohibit their brokers from borrowing their units.We have adopted certain valuation methodologies in determining a unitholder’s allocations of income, gain, loss anddeduction. The IRS may challenge these methodologies or the resulting allocations, which could adversely affect the valueof the common units.In determining the items of income, gain, loss and deduction allocable to our unitholders, we must routinelydetermine the fair market value of our assets. Although we may, from time to time, consult with professional appraisersregarding valuation matters, we make many fair market value estimates using a methodology based on the market value ofour common units as a means to measure the fair market value of our assets. The IRS may challenge these valuation methodsand the resulting allocations of income, gain, loss and deduction.A successful IRS challenge to these methods or allocations could adversely affect the timing or amount of taxableincome or loss being allocated to our unitholders. It also could affect the amount of gain from our unitholders’ sale ofcommon units and could have a negative impact on the value of the common units or result in audit adjustments to ourunitholders’ tax returns without the benefit of additional deductions.Our unitholders will likely be subject to state and local taxes and income tax return filing requirements in jurisdictionswhere they do not live as a result of investing in our common units.In addition to U.S. federal income taxes, our unitholders may be subject to other taxes, including foreign, state andlocal taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the variousjurisdictions in which we conduct business or own property now or in the future, even if they do not live in any of thosejurisdictions. Our unitholders will likely be required to file foreign, state and local income tax returns and pay state and localincome taxes in some or all of these various jurisdictions. Further, our unitholders may be subject to penalties for failure tocomply with those requirements.We currently own assets in multiple states. Many of these states currently impose a personal income tax onindividuals, corporations and other entities. As we make acquisitions or expand our business, we may own assets or conductbusiness in additional states that impose a personal income tax. It is our unitholders’ responsibility to file all U.S. federal,foreign, state and local tax returns. ITEM 1B. UNRESOLVED STAFF COMMENTSNone. ITEM 2. PROPERTIESInformation regarding our properties is contained in Part I, Item 1. “Business” and Part II, Item 7. “Management’sDiscussion and Analysis of Financial Condition and Results of Operations.” ITEM 3. LEGAL PROCEEDINGSDuring the fourth quarter of 2016, we re‑purchased a shipment of wood pellets from one customer and subsequentlysold it to a different customer in a back‑to‑back transaction. Smoldering was observed onboard the vessel carrying theshipment, which resulted in damage to a portion of the shipment and one of the vessel’s five cargo holds (the “ShippingEvent”). The disponent owner of the vessel (the “Shipowner”) had directly or indirectly chartered the vessel from certainother parties (collectively, the “Head Owners”) and in turn contracted with Cottondale as the charterer of the vessel.Following the mutual appointment of arbitrators in connection with the Shipping Event, on June 8, 2017, the Shipownersubmitted claims against Cottondale (the “Claims”) alleging damages of approximately $11.8 million (calculated usingexchange rates as of December 31, 2017), together with other unquantified losses and damages. The Claims provide that theShipowner would seek indemnification and other damages from Cottondale to the extent44 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsthat the Shipowner is unsuccessful in its defense of claims raised by the Head Owners against it for damages arising inconnection with the Shipping Event.Although it is reasonably possible that the Shipping Event may result in additional costs and liabilities for ouraccount, responsibility for such costs and liabilities incurred in connection with the Shipping Event is disputed among thevarious parties involved. If any such costs and liabilities ultimately are allocated to us, a portion may be recovered underinsurance. We believe we have meritorious defenses to the Claims, but we are generally unable to predict the timing oroutcome of any claims or proceedings, including the Claims, associated with the Shipping Event, or any insurance recoveriesin respect thereof. Consequently, we are unable to provide an estimate of the amount or range of possible loss. ITEM 4. MINE SAFETY DISCLOSURESNot applicable. 45 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIESMarket InformationOur common units representing limited partner interests in the Partnership (“common units”) are traded on the NewYork Stock Exchange (“NYSE”) under the symbol “EVA.” The following tables set forth the range of high and low salesprices per unit for our common units, as reported by the NYSE, and the quarterly cash distributions for the indicated periods: Price Range Cash Year Ended December 31, 2017: High Low Distributions Record Date Payment DateFourth Quarter $31.95 $26.73 $0.620 February 15, 2018 February 28, 2018Third Quarter $30.30 $27.18 $0.615 November 15, 2017 November 29, 2017Second Quarter $30.60 $26.33 $0.570 August 15, 2017 August 29, 2017First Quarter $29.98 $24.60 $0.555 May 18, 2017 May 30, 2017 Price Range Cash Year Ended December 31, 2016: High Low Distributions Record Date Payment DateFourth Quarter $29.85 $24.45 $0.535 February 15, 2017 February 28, 2017Third Quarter $28.40 $21.02 $0.530 November 14, 2016 November 29, 2016Second Quarter $24.86 $19.31 $0.525 August 15, 2016 August 29, 2016First Quarter $22.60 $13.73 $0.510 May 16, 2016 May 27, 2016 As of February 16, 2018, there were 14,445,268 common units outstanding held by three unitholders of record.Because many of our common units are held by brokers and other institutions on behalf of unitholders, we are unable toestimate the total number of unitholders represented by these unitholders of record. As of February 16, 2018, we also had11,905,138 subordinated units outstanding. There is no established public market in which the subordinated units are traded.As of February 16, 2018, our sponsor held approximately 9% of the common units and all of the subordinated units.Cash Distribution PolicyGeneralOur partnership agreement provides that our General Partner will make a determination as to whether to make adistribution, but our partnership agreement does not require us to pay distributions at any time or in any amount. Instead, theboard of directors of our General Partner adopted a cash distribution policy that sets forth our General Partner’s intention withrespect to the distributions to be made to unitholders. Pursuant to our cash distribution policy, within 60 days after the end ofeach quarter, we intend to distribute to the holders of common and subordinated units on a quarterly basis at least theminimum quarterly distribution of $0.4125 per unit, or $1.65 on an annualized basis, to the extent we have sufficient cashafter establishment of cash reserves and payment of fees and expenses, including payments to our General Partner and itsaffiliates.The board of directors of our General Partner may change the foregoing distribution policy at any time and fromtime to time, and even if our cash distribution policy is not modified or revoked, the amount of distributions paid under ourpolicy and the decision to make any distribution is determined by our General Partner. Our partnership agreement does notcontain a requirement for us to pay distributions to our unitholders, and there is no guarantee that we will pay any specificdistribution level, or any distribution, on the units in any quarter. However, our partnership agreement does containprovisions intended to motivate our General Partner to make steady, increasing and sustainable distributions over time.46 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPlease read Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Senior Secured Credit Facilities” for a discussion of the provisions included in our credit facility that mayrestrict our ability to make distributions.Subordination PeriodOur partnership agreement provides that, during the subordination period, holders of our common units have theright to receive distributions from operating surplus (as defined in our partnership agreement) each quarter in an amountequal to $0.4125 per common unit, which amount is defined in our partnership agreement as the minimum quarterlydistribution, plus any arrearages in the payment of the minimum quarterly distribution on the common units from priorquarters, before any distributions from operating surplus may be made to holders of the subordinated units. These units aredeemed “subordinated” because for a period of time, referred to as the subordination period, the subordinated units will notbe entitled to receive any distributions from operating surplus until the common units have received the minimum quarterlydistribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Furthermore, noarrearages will be paid on the subordinated units. We expect the subordination period to expire in May 2018, at which timeall of the subordinated units will convert into common units on a one‑for‑one basis.General Partner Interest and Incentive Distribution RightsOur General Partner owns a non‑economic general partner interest in us, which does not entitle it to receive cashdistributions. However, our General Partner owns the incentive distribution rights and may in the future own common unitsor other equity interests in us and will be entitled to receive distributions on any such interests.Incentive distribution rights represent the right to receive increasing percentages (15.0%, 25.0% and 50.0%) ofquarterly distributions from operating surplus after the minimum quarterly distribution and the target distribution levels havebeen achieved. Our General Partner currently holds the incentive distribution rights, but may transfer these rights separatelyfrom its general partner interest.Unregistered Sales of SecuritiesOn December 14, 2016, a joint venture between our sponsor and Hancock Natural Resource Group, Inc. and certainother affiliates of John Hancock Life Insurance Company (U.S.A.) (the “First Hancock JV”) contributed to Enviva, LP all ofthe issued and outstanding limited liability company interests in Enviva Pellets Sampson, LLC (the “Sampson Drop‑Down”).In connection with the Sampson Drop‑Down, we issued a total of 1,098,415 common units at a value of $27.31 per unit, or$30.0 million of common units, to John Hancock Life Insurance Company of New York and John Hancock Life InsuranceCompany (U.S.A.), each an affiliate of the First Hancock JV, in reliance upon the exemption from the registrationrequirements in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). For more information on theSampson Drop‑Down, please read Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations—Sampson Drop‑Down.”On December 11, 2015, the First Hancock JV contributed to Enviva, LP all the issued and outstanding limitedliability company interests in Enviva Pellets Southampton, LLC. In connection with the Southampton Drop‑Down, we issued942,023 common units valued at $15.0 million, to a wholly owned subsidiary of our sponsor in reliance upon the exemptionfrom the registration requirements in Section 4(a)(2) of the Securities Act. For more information on the SouthamptonDrop‑Down, please read Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Recent Developments—Southampton Drop‑Down.”Securities Authorized for Issuance under Equity Compensation PlansPlease read Part III, Item 12. “Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters” for information regarding our equity compensation plans.47 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 6. SELECTED FINANCIAL DATAThe following table presents our selected historical financial data, for the periods and as of the dates indicated, forus and our Predecessor.The financial statements have been retroactively recast to reflect the contribution of our sponsor’s interest in ourPredecessor and Enviva GP, LLC as if the contributions occurred at the beginning of the periods presented, the contributionof Enviva Cottondale Acquisition II, LLC as if the contribution occurred on January 5, 2015, which is the date on which oursponsor acquired Green Circle Bio Energy, Inc. (“Green Circle”), which owned the Cottondale plant, the contribution ofEnviva Pellets Southampton, LLC (“Southampton”) as if it occurred on April 9, 2015, the date Southampton was originallyconveyed to the First Hancock JV, and the contribution of Enviva Pellets Sampson, LLC (“Sampson”) and Enviva Port ofWilmington, LLC (“Wilmington”) as if they had occurred on May 15, 2013, the date Sampson and Wilmington wereoriginally organized.The selected statement of operations and statements of cash flow data for the years ended December 31, 2017, 2016and 2015 and the balance sheet data as of December 31, 2017 and 2016 are derived from our audited consolidated financialstatements included in Item 8 of this Annual Report. Year Ended December 31, 2016 2015 2014 2013 2017 (Recast) (Recast) (Recast) (Recast) (Predecessor) (Predecessor) (in thousands, except per metric ton and operating data and per unit data)Statement of Operations Data: Product sales $522,250 $444,489 $450,980 $286,641 $176,051Other revenue 20,971 19,787 6,394 3,495 3,836Net revenue 543,221 464,276 457,374 290,136 179,887Costs of goods sold, excluding depreciation and amortization 419,616 357,418 365,061 251,058 152,720Loss on disposal of assets 4,899 2,386 2,081 340 223Depreciation and amortization 39,904 27,700 30,692 18,971 11,827Total cost of goods sold 464,419 387,504 397,834 270,369 164,770Gross margin 78,802 76,772 59,540 19,767 15,117General and administrative expenses 30,107 33,098 23,922 16,958 16,150Disposal and impairment of assets held for sale 827 9,991 — — —Total general and administrative 30,934 43,089 23,922 16,958 16,150Income (loss) from operations 47,868 33,683 35,618 2,809 (1,033)Other income (expense): Interest expense (31,744) (15,643) (10,558) (8,724) (5,460)Related-party interest expense — (578) (1,154) — —Early retirement of debt obligation — (4,438) (4,699) (73) —Other income (1,751) 439 979 22 1,019Total other expense, net (33,495) (20,220) (15,432) (8,775) (4,441)Income (loss) before income tax expense 14,373 13,463 20,186 (5,966) (5,474)Income tax expense — — 2,623 15 23Net income (loss) 14,373 13,463 17,563 (5,981) (5,497)Less net loss attributable to noncontrolling partners’ interests 3,140 5,804 2,859 304 58Net income (loss) attributable to Enviva Partners, LP $17,513 $19,267 $20,422 $(5,677) $(5,439)Less: Predecessor (loss) income to May 4, 2015 (prior to IPO) $ — $ — (2,132) 264 (5,439)Less: Pre-acquisition income from April 10, 2015 to December 10, 2015 fromoperations of Enviva Pellets Southampton, LLC Drop-Down allocated to GeneralPartner — — 6,264 — —Less: Pre-acquisition loss from inception to December 13, 2016 from operations ofEnviva Pellets Sampson, LLC Drop-Down allocated to General Partner — (3,231) (1,815) (3,440) —Less: Pre-acquisition loss from inception to October 1, 2017 from operations ofEnviva Port of Wilmington, LLC Drop-Down allocated to General Partner (3,049) (2,110) (937) (2,501) —Enviva Partners, LP partners’ interest in net income $20,562 $24,608 $19,042 $ — $ —Net income per limited partner common unit: Basic $0.65 $0.95 $0.80 Diluted $0.61 $0.91 $0.79 Net income per limited partner subordinated unit: Basic $0.65 $0.93 $0.80 Diluted $0.65 $0.93 $0.79 See Part II, Item 8. “Financial Statements and Supplementary Data—Note 13, Related-PartyTransactions 48 (1)(1)(1)(1)Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Year Ended December 31, 2016 2015 2014 2013 2017 (Recast) (Recast) (Recast) (Recast) (Predecessor) (Predecessor) (in thousands, except per metric ton and operating data and per unit data)Statement of Cash Flow Data: Net cash provided by (used in): Operating activities $87,095 $55,804 $65,857 $28,992 $(7,557)Investing activities (28,601) (111,124) (103,490) (17,174) (115,799)Financing activities (58,436) 53,658 39,173 (14,789) 115,235Other Financial Data: Adjusted EBITDA(1) $102,381 $79,291 $71,710 $22,182 $12,101Adjusted gross margin per metric ton(1) $45.38 $45.55 $38.89 $25.91 $29.18Maintenance capital expenditures(2) 4,353 5,187 4,359 515 —Distributable cash flow(1) 67,731 59,775 57,245 14,964 7,650Operating Data: Total metric tons sold 2,724 2,346 2,374 1,508 931Balance Sheet Data (at period end): Cash and cash equivalents $524 $466 $2,128 $592 $3,558Total assets 760,111 801,376 688,209 388,395 395,018Long-term debt and capital lease obligations (including current portion) 401,017 351,080 207,632 90,481 95,539Total liabilities 549,742 424,514 266,539 110,781 123,607Partners’ capital 210,369 376,862 421,670 277,614 271,411 (1)For more information, please read “—Non‑GAAP Financial Measures” and Part II, Item 7. “Management’s Discussionand Analysis of Financial Condition and Results of Operations—How We Evaluate Our Operations.”(2)Maintenance capital expenditures are cash expenditures made to maintain our long‑term operating capacity or netincome. Non‑GAAP Financial MeasuresAdjusted gross margin per metric ton, adjusted EBITDA and distributable cash flow are not financial measurespresented in accordance with accounting principles generally accepted in the United States (“GAAP”). We believe that thepresentation of these non‑GAAP financial measures provides useful information to investors in assessing our financialcondition and results of operations. Our non‑GAAP financial measures should not be considered as alternatives to the mostdirectly comparable GAAP financial measures. Each of these non‑GAAP financial measures has important limitations as ananalytical tool because they exclude some, but not all, items that affect the most directly comparable GAAP financialmeasures. You should not consider adjusted gross margin per metric ton, adjusted EBITDA or distributable cash flow inisolation or as substitutes for analysis of our results as reported under GAAP.Our definitions of these non‑GAAP financial measures may not be comparable to similarly titled measures of othercompanies, thereby diminishing their utility.Adjusted Gross Margin per Metric TonWe use adjusted gross margin per metric ton to measure our financial performance. We define adjusted gross marginas gross margin excluding asset disposals and depreciation and amortization included in cost of goods sold. We believeadjusted gross margin per metric ton is a meaningful measure because it compares our revenue‑generating activities to ouroperating costs for a view of profitability and performance on a per metric ton basis. Adjusted gross margin per metric tonwill primarily be affected by our ability to meet targeted production volumes and to control direct and indirect costsassociated with procurement and delivery of wood fiber to our production plants and the production and distribution ofwood pellets.49 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsAdjusted EBITDAWe view adjusted EBITDA as an important indicator of our financial performance. We define adjusted EBITDA asnet income or loss excluding depreciation and amortization, interest expense, income tax expense, early retirement of debtobligations, non‑cash unit compensation expense, asset impairments and disposals, changes in the fair value of derivativeinstruments and certain items of income or loss that we characterize as unrepresentative of our ongoing operations. AdjustedEBITDA is a supplemental measure used by our management and other users of our financial statements, such as investors,commercial banks and research analysts, to assess the financial performance of our assets without regard to financingmethods or capital structure.Distributable Cash FlowWe define distributable cash flow as adjusted EBITDA less maintenance capital expenditures and interest expensenet of amortization of debt issuance costs, debt premium and original issue discount. We use distributable cash flow as aperformance metric to compare the cash‑generating performance of the Partnership from period to period and to compare thecash‑generating performance for specific periods to the cash distributions (if any) that are expected to be paid to ourunitholders. We do not rely on distributable cash flow as a liquidity measure.50 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe following tables present a reconciliation of each of adjusted gross margin per metric ton, adjusted EBITDA anddistributable cash flow to the most directly comparable GAAP financial measure for each of the periods indicated. Year Ended December 31, 2016 2015 2014 2013 2017 (Recast) (Recast) (Recast) (Recast) (Predecessor) (Predecessor) (in thousands, except per metric ton) Reconciliation of gross margin to adjusted gross margin permetric ton: Metric tons sold 2,724 2,346 2,374 1,508 931Gross margin $78,802 $76,772 $59,540 $19,767 $15,117Loss on disposal of assets 4,899 2,386 2,081 340 223Depreciation and amortization 39,904 27,700 30,692 18,971 11,827Adjusted gross margin $123,605 $106,858 $92,313 $39,078 $27,167Adjusted gross margin per metric ton $45.38 $45.55 $38.89 $25.91 $29.18 Year Ended December 31, 2016 2015 2014 2013 2017 (Recast) (Recast) (Recast) (Recast) (Predecessor) (Predecessor) (in thousands) Reconciliation of adjusted EBITDA and distributable cashflow to net income: Net income (loss) $14,373 $13,463 17,563 $(5,981) $(5,497)Add: Depreciation and amortization 40,361 27,735 30,738 19,009 11,887Interest expense 31,744 16,221 11,712 8,724 5,460Early retirement of debt obligation — 4,438 4,699 73 —Purchase accounting adjustment to inventory — — 697 — —Non-cash unit compensation expense 5,014 4,230 704 2 5Income tax expense — — 2,623 15 23Asset impairments and disposals 5,726 12,377(1) 2,081 340 223Changes in the fair value of derivative instruments 1,565 — — — —Transaction expenses 3,598 827 893 — —Adjusted EBITDA $102,381 $79,291 $71,710 $22,182 $12,101Less: Interest expense, net of amortization of debt issuancecosts, debt premium and original issue discount 30,297 14,329 10,106 6,703 4,451Maintenance capital expenditures 4,353 5,187 4,359 515 —Distributable cash flow attributable to Enviva Partners, LP $67,731 $59,775 $57,245 $14,964 $7,650Less: Distributable cash flow attributable to incentivedistribution rights 3,398 1,077 — — —Distributable cash flow attributable to Enviva Partners, LPlimited partners $64,333 $58,698 $57,245 $14,964 $7,650(1)In December 2016, we initiated a plan to sell the Wiggins plant. The carrying amount of the assets held for saleexceeded the estimated fair value of the Wiggins plant, which resulted in a $10.0 million non‑cash impairment charge toearnings. In December 2017, we sold the Wiggins plant for $0.4 million and recorded a loss on the sale $0.8 million, net,upon deconsolidation.51 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSThe following discussion of our historical performance, financial condition and future prospects should be read inconjunction with Part I, Item 1. “Business” and the consolidated financial statements in Part II, Item 8. “FinancialStatements and Supplementary Data.”References in this Annual Report to the “Predecessor,” “our Predecessor,” “we,” “our,” “us” or like terms forperiods prior to April 9, 2015 refer to Enviva, LP and its subsidiaries (other than Enviva Pellets Cottondale, LLC).References to the “Partnership,” “we,” “our,” “us” or like terms for periods on and after April 9, 2015 refer to EnvivaPartners, LP and its subsidiaries. References to “our sponsor” refer to Enviva Holdings, LP, and, where applicable, itswholly owned subsidiaries Enviva MLP Holdco, LLC and Enviva Development Holdings, LLC. References to “our GeneralPartner” refer to Enviva Partners GP, LLC, a wholly owned subsidiary of Enviva Holdings, LP. References to “EnvivaManagement” refer to Enviva Management Company, LLC, a wholly owned subsidiary of Enviva Holdings, LP, andreferences to “our employees” refer to the employees of Enviva Management. References to the “First Hancock JV” and the“Second Hancock JV” refer to Enviva Wilmington Holdings, LLC and Enviva JV Development Company, LLC, respectively,which are joint ventures between our sponsor, Hancock Natural Resource Group, Inc. and certain other affiliates of JohnHancock Life Insurance Company (U.S.A.). Please read Cautionary Statement Regarding Forward‑Looking Statements onpage 1 and Part 1, Item 1A. “Risk Factors” for information regarding certain risks inherent in our business.Basis of PresentationThe following discussion of our historical performance and financial condition is derived from our auditedconsolidated financial statements and the audited financial statements of our Predecessor and Enviva PelletsCottondale, LLC (“Cottondale”). On April 9, 2015, we, the Predecessor and our sponsor executed a series of transactions thatwere accounted for as common control transactions (the “Reorganization”). On April 9, 2015, our sponsor contributed some,but not all, of our Predecessor’s assets and liabilities to us. Specifically, our sponsor’s interest in Enviva PelletsSouthampton, LLC (“Southampton”) was excluded from the April 9, 2015 contribution as it was conveyed to the FirstHancock JV, a consolidated entity of the sponsor, on April 9, 2015. Our sponsor contributed its interest in Cottondale, whichowns a wood pellet production plant in Cottondale, Florida (the “Cottondale plant”), to us on April 9, 2015.On December 11, 2015, the First Hancock JV contributed to Enviva, LP all of the issued and outstanding limitedliability company interests in Southampton together with an off‑take contract and a related third-party shipping contract fortotal consideration of $131.0 million pursuant to the terms of a contribution agreement between the Partnership and the FirstHancock JV (the “Southampton Drop‑Down”).On December 14, 2016, the First Hancock JV contributed to Enviva, LP all of the issued and outstanding limitedliability company interests in Enviva Pellets Sampson, LLC (“Sampson”) for total consideration of $175.0 million (the“Sampson Drop‑Down”). The Sampson Drop‑Down also included two off‑take contracts and related third‑party shippingcontracts.On October 2, 2017, the First Hancock JV contributed to Enviva, LP all of the issued and outstanding limitedliability company interests in Enviva Port of Wilmington, LLC (“Wilmington”) for total consideration of $130.0 million (the“Wilmington Drop‑Down”).The consolidated financial statements for periods prior to our initial public offering (“the IPO”) include the resultsof our Predecessor and its subsidiaries and include all revenues, costs, assets and liabilities attributed to our Predecessor afterthe elimination of all intercompany accounts and transactions. The consolidated financial statements for the period after theIPO pertain to our operations. Our consolidated financial statements have been retroactively recast to reflect the contributionof our sponsor’s interest in our Predecessor and Enviva GP, LLC as if the contributions had occurred at the beginning of theperiods presented, the contribution of Enviva Cottondale Acquisition II, LLC (“Acquisition II”) as if the contribution hadoccurred on January 5, 2015, which is the date on which our sponsor52 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsacquired Green Circle Bio Energy, Inc. (“Green Circle”), which owned the Cottondale plant, the Southampton Drop‑Down asif it occurred on April 9, 2015, the date Southampton was originally conveyed to the First Hancock JV and the SampsonDrop‑Down and the Wilmington Drop-Down as if they had occurred on May 15, 2013, the date Sampson and Wilmingtonwere originally organized. Entities contributed by or distributed to our sponsor or the First Hancock JV are consideredentities under common control and are recorded at historical cost.Business OverviewWe are the world’s largest supplier by production capacity of utility‑grade wood pellets to major power generators.We own and operate six industrial‑scale production plants in the Southeastern United States that have a combined woodpellet production capacity of 2.9 million MTPY. We also own dry‑bulk, deep‑water marine terminal assets at the Port ofChesapeake (the “Chesapeake terminal”) and the Port of Wilmington, North Carolina (the “Wilmington terminal”). All of ourfacilities are located in geographic regions with low input costs and favorable transportation logistics. Owning thesecost‑advantaged assets, the output from which is fully contracted, in a rapidly expanding industry provides us with aplatform to generate stable and growing cash flows that should enable us to increase our per‑unit cash distributions over time,which is our primary business objective. For a more complete description of our business, please read Part I, Item 1.“Business.”Our sales strategy is to fully contract the production capacity of the Partnership. During 2017, contracted volumesunder our existing off‑take contracts are approximately equal to the full production capacity of our production plants.Our off‑take contracts provide for sales of 2.9 million metric tons (“MT”) of wood pellets in 2018 and have aweighted-average remaining term of 9.5 years from February 15, 2018. We intend to continue expanding our business bytaking advantage of the growing demand for our product that is driven by the conversion of coal‑fired power generation andcombined heat and power plants to co‑fired or dedicated biomass‑fired plants, principally in Europe and, increasingly, inSouth Korea and Japan.Recent DevelopmentsWilmington Drop‑DownOn October 2, 2017, pursuant to the terms of a contribution agreement between the Partnership and the FirstHancock JV (the “Wilmington Contribution Agreement”), the First Hancock JV sold to the Partnership all of the issued andoutstanding limited liability company interests in Wilmington, which owns the Wilmington terminal.The purchase price for Wilmington was $130.0 million, which included an initial payment of $54.6 million, net ofan approximate purchase price adjustment of $1.4 million. The initial payment was funded with borrowings from revolvingcredit commitments and cash on hand. We accounted for the Wilmington Drop-Down as a combination of entities undercommon control at historical cost in a manner similar to a pooling of interests. Accordingly, the consolidated financialstatements for the periods prior to the acquisition were retrospectively recast to reflect the acquisition as if it had occurred onMay 15, 2013, the date Wilmington was originally organized.The Wilmington terminal, which is capable of receiving product by rail and truck, has the capacity to store up to90,000 MT of wood pellets, and load up to Panamax-sized vessels. It utilizes state-of-the-art handling equipment and storageinfrastructure designed to maintain product quality and safety with throughput capacity of up to 3.0 million MTPY of woodpellets.Wilmington will handle up to approximately 600,000 MTPY of throughput from the Sampson plant and is party to along-term terminal services agreement with Enviva Pellets Greenwood, LLC, a wholly owned subsidiary of the SecondHancock JV (“Greenwood”). Wilmington will handle throughput volumes sourced from Greenwood’s wood pellet productionplant located in Greenwood, South Carolina (the “Greenwood plant”). The terminal services agreement with Greenwoodprovides for deficiency payments to Wilmington if minimum throughput requirements are not met.53 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn addition, the Wilmington Contribution Agreement contemplates that Wilmington will enter into a long-termterminal services agreement (the “Wilmington Hamlet TSA”) with the First Hancock JV and Enviva Pellets Hamlet, LLC(“Hamlet”) to receive, store and load wood pellets from the First Hancock JV’s proposed production plant in Hamlet, NorthCarolina (the “Hamlet plant”) when the First Hancock JV completes construction of the Hamlet plant. The WilmingtonHamlet TSA also provides for deficiency payments to Wilmington if minimum throughput requirements are not met. Pursuantto the Wilmington Contribution Agreement, following notice of the anticipated first delivery of wood pellets to theWilmington terminal from the Hamlet plant, Wilmington, Hamlet, and the First Hancock JV would enter into the WilmingtonHamlet TSA and the Partnership would make a final payment of $74.0 million in cash or common units representing limitedpartnership interests in the Partnership (“common units”) to the First Hancock JV, subject to certain conditions, as deferredconsideration for the Wilmington Drop-Down.Wilmington also entered into a throughput option agreement with the sponsor granting the sponsor, subject tocertain conditions, the option to obtain terminal services at the Wilmington terminal at marginal cost throughput rates forwood pellets produced by one of the sponsor’s potential wood pellet production plants. Senior Notes Due 2021On November 1, 2016, we issued $300.0 million in aggregate principal amount of 8.5% senior unsecured notes dueNovember 1, 2021 (the “Senior Notes”) to eligible purchasers in a private placement transaction. In August 2017, holders of100% of the Senior Notes tendered such notes in exchange for newly issued registered notes with terms substantiallyidentical in all material respects to the Senior Notes (except that the registered notes are not subject to restrictions ontransfer).On October 10, 2017, we completed the issuance to an institutional investor in a private placement transaction of anadditional $55.0 million in aggregate principal amount of Senior Notes at a price of 106.25% of par plus accrued interestfrom May 1, 2017. The additional Senior Notes have the same terms as our outstanding Senior Notes. The sale of theadditional Senior Notes at a purchase price of $58.4 million resulted in gross proceeds of approximately $60.0 million afterincluding accrued interest of $2.1 million and deducting estimated expenses of approximately $0.5 million. The netproceeds were used to repay the borrowings on our revolving credit facility that were used to fund the Wilmington Drop-Down and for general partnership purposes.In December 2017, the holder of 100% of the additional Senior Notes tendered such notes in exchange for newlyissued registered notes with terms substantially identical in all material respects to the additional Senior Notes (except thatthe registered notes are not subject to restrictions on transfer). The additional Senior Notes will be treated together with theoutstanding Senior Notes as a single class for all purposes under the Indenture.Sale of the Wiggins PlantIn December 2016, we initiated a plan to sell our 110,000 MTPY production plant located in Wiggins, Mississippiand related assets (the “Wiggins plant”). We sold the Wiggins plant to a third-party buyer for a purchase price of $0.4 millionon December 27, 2017, and on December 28, 2017, Enviva Pellets Wiggins, LLC (“Wiggins”), the owner of the Wigginsplant, was dissolved. We recorded a loss on the sale of $0.8 million, net, upon deconsolidation.At‑the‑Market Offering ProgramOn August 8, 2016, we filed a prospectus supplement to our shelf registration filed with the U.S. SecuritiesExchange Act Commission (“SEC”) on June 24, 2016, for the continuous offering of up to $100.0 million of common units,in amounts, at prices and on terms to be determined by market conditions and other factors at the time of our offerings. InAugust 2016, we also entered into an equity distribution agreement (the “Equity Distribution Agreement”) with certainmanagers pursuant to which we may offer and sell common units from time to time through or to one or more of the managers,subject to the terms and conditions set forth in the Equity Distribution Agreement, of up to an aggregate sales amount of$100.0 million (the “ATM Program”).54 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsDuring the years ended December 31, 2017 and 2016, we sold 71,368 and 358,593, respectively, under the EquityDistribution Agreement for net proceeds of $1.9 million, net of an insignificant amount of commissions, during 2017, and netproceeds of $9.3 million, net of $0.1 million of commissions, during 2016. Accounting and other fees of approximately $0.2million were offset against the proceeds during 2017. Deferred issuance costs of approximately $0.4 million, primarilyconsisting of legal, accounting and other fees, were offset against the proceeds during 2016. Net proceeds from sales underthe ATM Program were used for general partnership purposes. As of February 16, 2018, $88.6 million of common unitsremained available for issuance under the ATM Program.How We Evaluate Our OperationsAdjusted Gross Margin per Metric TonWe use adjusted gross margin per metric ton to measure our financial performance. We define adjusted gross marginas gross margin excluding asset disposals and depreciation and amortization included in cost of goods sold. We believeadjusted gross margin per metric ton is a meaningful measure because it compares our revenue‑generating activities to ouroperating costs for a view of profitability and performance on a per metric ton basis. Adjusted gross margin per metric tonwill primarily be affected by our ability to meet targeted production volumes and to control direct and indirect costsassociated with procurement and delivery of wood fiber to our production plants and the production and distribution ofwood pellets.Adjusted EBITDAWe view adjusted EBITDA as an important indicator of our financial performance. We define adjusted EBITDA asnet income or loss excluding depreciation and amortization, interest expense, income tax expense, early retirement of debtobligations, non‑cash unit compensation expense, asset impairments and disposals, changes in the fair value of derivativeinstruments and certain items of income or loss that we characterize as unrepresentative of our ongoing operations. AdjustedEBITDA is a supplemental measure used by our management and other users of our financial statements, such as investors,commercial banks and research analysts, to assess the financial performance of our assets without regard to financingmethods or capital structure.Distributable Cash FlowWe define distributable cash flow as adjusted EBITDA less maintenance capital expenditures and interest expensenet of amortization of debt issuance costs, debt premium and original issue discounts. We use distributable cash flow as aperformance metric to compare the cash‑generating performance of the Partnership from period to period and to compare thecash‑generating performance for specific periods to the cash distributions (if any) that are expected to be paid to ourunitholders. We do not rely on distributable cash flow as a liquidity measure.Non‑GAAP Financial MeasuresAdjusted gross margin per metric ton, adjusted EBITDA and distributable cash flow are not financial measurespresented in accordance with accounting principles generally accepted in the United States (“GAAP”). We believe that thepresentation of these non‑GAAP financial measures provides useful information to investors in assessing our financialcondition and results of operations. Our non‑GAAP financial measures should not be considered as alternatives to the mostdirectly comparable GAAP financial measures. Each of these non‑GAAP financial measures has important limitations as ananalytical tool because they exclude some, but not all, items that affect the most directly comparable GAAP financialmeasures. You should not consider adjusted gross margin per metric ton, adjusted EBITDA or distributable cash flow inisolation or as substitutes for analysis of our results as reported under GAAP.Our definitions of these non‑GAAP financial measures may not be comparable to similarly titled measures of othercompanies, thereby diminishing their utility. Please read Part II, Item 6. “Selected Financial Data—Non‑GAAP FinancialMeasures” for a reconciliation of each of adjusted gross margin per metric ton, adjusted EBITDA and distributable cash flowto the most directly comparable GAAP financial measure.55 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsFactors Impacting Comparability of Our Financial ResultsOur future results of operations and cash flows may not be comparable to our historical consolidated results ofoperations and cash flows, principally for the following reasons:Our sponsor contributed its interest in Wilmington to us on October 2, 2017. Our consolidated financialstatements have been retroactively recast to reflect the contribution of our sponsor’s interest in Wilmington as if thecontribution had occurred on May 15, 2013, the date Wilmington was originally organized. The recast amounts for the yearsended December 31, 2017, 2016 and 2015 primarily include general and administrative expenses associated with terminaldevelopment costs incurred during the construction of the Wilmington terminal. We do not expect to incur these costs goingforward as the terminal began operations during the fourth quarter of 2016. The amount paid in excess of historical cost isrecorded as a deemed dividend to the General Partner.We increased our production capacity with the Sampson Drop-Down and began deliveries under a new long‑‑termoff‑‑take contract in December 2016. In connection with the Sampson Drop‑Down, the First Hancock JV assigned to us aten‑year, take‑or‑pay off‑take contract with Ørsted (the “Ørsted Contract”). The Ørsted Contract commenced onSeptember 1, 2016 and provides for sales of 360,000 MTPY for the first delivery year and 420,000 MTPY for years twothrough ten. In the fourth quarter of 2017, we entered into an amendment to the Ørsted Contract for the supply of anincremental 200,000 MT from late 2018 through mid-2021. Ørsted’s obligations under the Ørsted Contract are guaranteedby its parent, Ørsted A/S. The Ørsted Contract, accompanied by our increased production capacity from the Sampson plant,will have a material effect on our product sales and resulting gross margin.We issued $300.0 million in aggregate principal amount of senior unsecured notes in a private placement toeligible purchasers. On November 1, 2016, we and Enviva Partners Finance Corp., a wholly owned subsidiary of thePartnership formed on October 3, 2016 for the purpose of being the co‑issuer of the notes, issued $300.0 million in aggregateprincipal amount of Senior Notes to eligible purchasers in a private placement under Rule 144A and Regulation S of theSecurities Act of 1933, as amended (the “Securities Act”), which resulted in net proceeds of $293.6 million after deductingestimated expenses and underwriting discounts of $6.4 million. On December 14, 2016, a portion of the net proceeds fromthe Senior Notes Offering, together with cash on hand and the issuance of 1,098,415 unregistered common units at a value of$27.31 per unit, or $30.0 million of common units, to affiliates of John Hancock Life Insurance Company (U.S.A.), fundedthe consideration payable for the Sampson Drop‑Down. The remainder of the net proceeds from the Senior Notes Offering wasused to repay certain outstanding term loan indebtedness under our Senior Secured Credit Facilities. As a result, ourconsolidated financial statements reflect the outstanding debt and interest expense associated with the Senior Notes.We issued $55.0 million in aggregate principal amount of senior unsecured notes in a private placement toeligible purchasers. On October 10, 2017, we completed the issuance to an institutional investor in a private placementtransaction of an additional $55.0 million in aggregate principal amount of Senior Notes. The additional Senior Notes havethe same terms as our outstanding Senior Notes. The additional Senior Notes will be treated together with the Senior Notes asa single class for all purposes under the Indenture.The sale of the additional Senior Notes at a purchase price of $58.4 million resulted in gross proceeds ofapproximately $60.0 million, after including accrued interest of $2.1 million and deducting estimated expenses ofapproximately $0.5 million. The proceeds were used to repay borrowings on our revolving credit facility, which were used tofund the Wilmington Drop-Down, and for general partnership purposes.In December 2017, the holder of 100% of the additional Senior Notes tendered such notes in exchange for newlyissued registered notes with terms substantially identical in all material respects to the additional Senior Notes (except thatthe registered notes are not subject to restrictions on transfer).We repaid a portion of the Original Credit Facilities and increased the capacity of our revolving credit facility. On April 9, 2015, we entered into a credit agreement (the “Credit Agreement”) providing for a $199.5 million aggregateprincipal amount of senior secured credit facilities (the “Original Credit Facilities”). We entered into an56 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsassumption agreement on December 11, 2015, providing for $36.5 million of incremental term loan borrowings (the“Incremental Term Borrowings” and, together with the Original Credit Facilities, the “Senior Secured Credit Facilities”)under the Credit Agreement. In October 2016, we entered into a second amendment to the Credit Agreement (the “SecondAmendment”), which became effective upon the closing of the Sampson Drop‑Down. Upon the consummation of theSampson Drop‑Down, a portion of the net proceeds from the Senior Notes Offering, together with cash on hand, was used torepay in full the outstanding principal and accrued interest on the Tranche A‑2 and Tranche A‑4 borrowings and to repay aportion of the outstanding principal and accrued interest on the Tranche A‑1 and Tranche A‑3 borrowings under the SeniorSecured Credit Facilities. Following the consummation of the Sampson Drop‑Down and repayment of a portion of the SeniorSecured Credit Facilities, the limit under our revolving credit commitments was increased from $25.0 million to$100.0 million pursuant to the Second Amendment.Revenue and costs for deliveries to customers can vary significantly between periods depending upon the mix ofcustomers and specific shipment and reimbursement for expenses, including the then‑current cost of fuel. Depending onthe specific off‑take contract, shipping terms are either Cost, Insurance and Freight (“CIF”), Cost and Freight (“CFR”) or Freeon Board (“FOB”). Under a CIF contract, we procure and pay for shipping costs, which include insurance and all othercharges, up to the port of destination for the customer. Under a CFR contract, we procure and pay for shipping costs, whichinclude insurance (excluding marine cargo insurance) and all other charges, up to the port of destination for the customer.Shipping costs under CIF and CFR contracts are included in the price to the customer and, as such, are included in revenueand cost of goods sold. Under FOB contracts, the customer is directly responsible for shipping costs. We have entered intofixed-price shipping contracts with reputable shippers matching the terms and volumes of our contracts for which we areresponsible for arranging shipping.How We Generate RevenueOverviewWe primarily earn revenue by supplying wood pellets to our customers under off‑take contracts, the majority of thecommitments under which are long term in nature. We refer to the structure of our contracts as “take‑or‑pay” because theyinclude a firm obligation of the customer to take a fixed quantity of product at a stated price and provisions that ensure wewill be compensated in case a customer fails to accept all or a part of the contracted volumes or terminates the contract. Eachcontract defines the annual volume of wood pellets that a customer is required to purchase and we are required to sell, thefixed price per MT for product satisfying a base net calorific value and other technical specifications. These prices are fixedfor the entire term, subject to annual inflation‑based adjustments and price escalators, as well as, in some instances, priceadjustments for product specifications and changes in underlying costs. In addition to sales of our product under theselong‑term, take‑or‑pay contracts, we routinely sell wood pellets under shorter‑term contracts, which range in volume andtenor and, in some cases, may include only one specific shipment. Because each of our contracts is a bilaterally negotiatedagreement, our revenue over the duration of these contracts does not generally follow spot market pricing trends. Our revenuefrom the sale of wood pellets is recognized when the goods are shipped, title and risk of loss passes to the customer, the salesprice to the customer is fixed and determinable, and collectability is reasonably assured.Depending on the specific off‑take contract, shipping terms are either CIF, CFR or FOB. Under a CIF contract, weprocure and pay for shipping costs, which include insurance and all other charges, up to the port of destination for thecustomer. Under a CFR contract, we procure and pay for shipping costs, which include insurance (excluding marine cargoinsurance) and all other charges, up to the port of destination for the customer. Shipping costs under CIF and CFR contractsare included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under FOB contracts,the customer is directly responsible for shipping costs. Our customer shipping terms, as well as the timing and size ofshipments during the year, can result in material fluctuations in our revenue recognized between periods but generally havelittle impact on gross margin.The majority of the wood pellets we supply to our customers is produced at our production plants, the sales of whichare included in “Product Sales.” We also fulfill our contractual commitments and take advantage of dislocations in marketsupply and demand by purchasing from and selling to third‑party market participants, including, in some57 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentscases, our customers. In these back‑to‑back transactions where title and risk of loss are immediately transferred to the ultimatepurchaser, revenue is recorded net of costs paid to the third‑party supplier. This revenue is included in “Other revenue.”In some instances, a customer may request to cancel, defer, or accelerate a shipment. Contractually, we will seek tooptimize our position by selling or purchasing the subject shipment to or from another party, including in some cases arelated party, either within our contracted off‑take portfolio or as an independent transaction on the spot market. In mostinstances, the original customer pays us a fee, including reimbursement of any incremental costs, which is included in “Otherrevenue.”Contracted BacklogAs of February 15, 2018, we had approximately $5.8 billion of product sales backlog for firm contracted productsales to power generators compared to approximately $5.7 billion as of February 1, 2017. Backlog represents the revenue tobe recognized under existing contracts assuming deliveries occur as specified in the contract. Contracted future product salesdenominated in foreign currencies, excluding revenue hedged with foreign currency forward contracts, are included in U.S.Dollars at February 1, 2018 forward rates. Please read Part II, Item 8. “Financial Statements and Supplementary Data—Derivative Instruments” for more information regarding our foreign currency forward contracts.Our expected future product sales revenue under our contracted backlog as of February 15, 2018 is as follows (inmillions):Period from February 15, 2018 to December 31, 2018 $523Year ending December 31, 2019 582Year ending December 31, 2020 and thereafter 4,691Total product sales contracted backlog $5,796 Costs of Conducting Our BusinessCost of Goods SoldCost of goods sold includes the costs to produce and deliver our wood pellets to customers. The principal expensesincurred to produce and deliver our wood pellets consist of raw material, production and distribution costs.We have strategically located our plants in the Southeastern United States, a region with plentiful wood fiberresources. We manage the supply of raw materials into our plants through a mixture of short‑term and long‑term contracts.Delivered wood fiber costs include stumpage as well as harvesting, transportation and, in some cases, size reduction servicesprovided by our suppliers. The majority of our product volumes are sold under off-take contracts that include costpass‑through mechanisms to mitigate increases in raw material and distribution costs.Production costs at our production plants consist of labor, energy, tooling, repairs and maintenance and plantoverhead costs. Production costs also include depreciation expense associated with the use of our plants and equipment andany gain or loss on disposal of associated assets. Some of our off‑take contracts include price escalators that mitigateinflationary pressure on certain components of our production costs. In addition to the wood pellets that we produce at ourowned and operated production plants, we selectively purchase additional quantities of wood pellets from our sponsor andthird‑party wood pellet producers.Distribution costs include all transportation costs from our plants to our port locations, any storage or handling costswhile the product remains at port and shipping costs related to the delivery of our product from our port locations to ourcustomers. Both the strategic location of our plants and our ownership or control of our deep-water terminals have allowedfor the efficient and cost‑effective transportation of our wood pellets. We seek to mitigate shipping risk by entering intolong‑term, fixed‑price shipping contracts with reputable shippers matching the terms and volumes of our off‑take contractspursuant to which we are responsible for arranging shipping. Certain of our off‑take contracts include58 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentspricing adjustments for volatility in fuel prices, which allow us to pass the majority of the fuel price risk associated withshipping through to our customers.Additionally, as deliveries are made, we amortize the purchase price of acquired customer contracts that wererecorded as intangible assets during the applicable contract term.Raw material, production and distribution costs associated with delivering our wood pellets to our owned andleased marine terminals and related- and third‑party wood pellet purchase costs are capitalized as a component of inventory.Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normalcapacity of the facilities. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associatedwith shipping our wood pellets to our customers and amortization of favorable acquired customer contracts are expensed asincurred. Our inventory is recorded using the first-in, first-out method (“FIFO”), which requires the use of judgment andestimates. Given the nature of our inventory, the calculation of cost of goods sold is based on estimates used in the valuationof the FIFO inventory and in determining the specific composition of inventory that is sold to each customer.General and Administrative ExpensesWe and our General Partner are party to a Management Services Agreement (the “MSA”) with Enviva Management.Under the MSA, direct or indirect internal or third‑party expenses incurred are either directly identifiable or allocated to us.Enviva Management estimates the percentage of employee salaries and related benefits, third‑party costs, office rent andexpenses and any other overhead costs to be provided to us. Each month, Enviva Management allocates the actual costsaccumulated in the financial accounting system using these estimates. Enviva Management also charges us for any directlyidentifiable costs such as goods or services provided at our request. We believe Enviva Management’s assumptions andallocations have been made on a reasonable basis and are the best estimate of the costs that we would have incurred on astand‑alone basis.Our consolidated financial statements have been recast to reflect the contribution of our sponsor’s interest inWilmington as if the contribution had occurred on May 15, 2013, the date Wilmington was originally organized. We do notdevelop plants or ports within the Partnership and therefore we do not incur startup and commissioning costs or overheadcosts related to construction activities. Prior to the consummation of the Wilmington Drop‑Down, Wilmington incurredgeneral and administrative costs related to development activities which included startup and commissioning activities priorto beginning production as well as incremental overhead costs related to construction activities. We do not expect to incurthese costs going forward.59 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsResults of Operations Year Ended December 31, 2017 Compared to Year Ended December 31, 2016 Year Ended December 31, 2017 2016(Recast) Change (in thousands)Product sales $522,250 $444,489 $77,761Other revenue 20,971 19,787 1,184Net revenue 543,221 464,276 78,945Cost of goods sold, excluding depreciation and amortization 419,616 357,418 62,198Loss on disposal of assets 4,899 2,386 2,513Depreciation and amortization 39,904 27,700 12,204Total cost of goods sold 464,419 387,504 76,915Gross margin 78,802 76,772 2,030General and administrative expenses 30,107 33,098 (2,991)Disposal and impairment of assets held for sale 827 9,991 (9,164)Total general and administrative 30,934 43,089 (12,155)Income from operations 47,868 33,683 14,185Interest expense (31,744) (15,643) (16,101)Related-party interest expense — (578) 578Early retirement of debt obligation — (4,438) 4,438Other (expense) income (1,751) 439 (2,190)Net income 14,373 13,463 910Less net loss attributable to noncontrolling partners’ interests 3,140 5,804 (2,664)Net income attributable to Enviva Partners, LP $17,513 $19,267 $(1,754) See Part II, Item 8. “Financial Statements and Supplementary Data—Note 13, Related-Party Transactions Product salesRevenue related to product sales (either produced by us or procured from a third party) increased to $522.3 millionin 2017 from $444.5 million in 2016. The $77.8 million increase was largely attributable to greater sales volumes, primarilyrelating to tons sold under the contract acquired in connection with the Sampson Drop-Down. In 2017, we sold 2,724,000MT of wood pellets compared to 2,346,000 in 2016, a 16% increase.Other revenueOther revenue increased to $21.0 million for the year ended December 31, 2017 compared to $19.8 million for theyear ended December 31, 2016. The $1.2 million increase was primarily attributable to a $2.8 million increase in related-party terminal services as a result of the Wilmington Drop-Down. Other revenue includes sales of wood pellets sourced fromthird-party pellet producers and delivered to our customers. In these back-to-back transactions, title and risk of lossimmediately transfers to the ultimate purchasers; accordingly, such transactions are presented on a net basis. Other revenuealso includes revenue derived from terminal services.Cost of goods soldCost of goods sold increased to $464.4 million for the year ended December 31, 2017 from $387.5 million for theyear ended December 31, 2016. The $76.9 million increase was primarily attributable to an increase in sales volumes anddepreciation expense. In 2017, there was approximately $12.6 million of incremental depreciation expense, related tomachinery and equipment at the Sampson plant and Wilmington terminal.60 (1)(1) (1)(1)Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsLoss on disposal of assetsWe incurred $4.9 million and $2.4 million of expense associated with the disposal of assets during the years endedDecember 31, 2017 and 2016, respectively, which was primarily attributable to the disposal of assets replaced in connectionwith growth and maintenance capital projects at two of our plants.Gross marginWe earned gross margin of $78.8 million and $76.8 million for the years ended December 31, 2017 and 2016,respectively. The gross margin increase of $2.0 million was primarily attributable to the following:·A $14.2 million increase in gross margin due to higher sales volumes. Our wood pellet sales volumes increasedby approximately 378,000 MT during 2017 as compared to 2016, representing a 16% increase, which isprincipally attributable to sales under the contract acquired in connection with the Sampson Drop-Down.·A $1.4 million increase in gross margin during 2017 as compared to 2016 due primarily to lower raw materialcosts during 2017 as compared to 2016. ·A $0.8 million increase in gross margin due to lower amortization costs as acquired contracts reach the end oftheir respective contract terms.Offsetting the above was:·An increase in depreciation expense during 2017, which decreased gross margin by $13.0 million as comparedto 2016. The increase in depreciation expense primarily related to machinery and equipment at the Sampsonplant and Wilmington terminal.·An increase of $2.5 million in loss on the disposal of assets during 2017, which is primarily attributable to thedisposal of assets replaced in connections with growth and maintenance capital projects at our wood pelletproduction plants.·A $0.4 million decrease in gross margin due to the mix of customer and shipping contracts during 2017 ascompared to 2016.Adjusted gross margin per metric ton Year Ended December 31, 2017 2016(Recast) Change (in thousands except per metric ton)Metric tons sold 2,724 2,346 378Gross margin $78,802 $76,772 $2,030Loss on disposal of assets 4,899 2,386 2,513Depreciation and amortization 39,904 27,700 12,204Adjusted gross margin $123,605 $106,858 $16,747Adjusted gross margin per metric ton $45.38 $45.55 $(0.17) We earned an adjusted gross margin of $123.6 million, or $45.38 per metric ton, for the year ended December 31,2017 and an adjusted gross margin of $106.9 million, or $45.55 per metric ton, for the year ended December 31, 2016. Thefactors impacting adjusted gross margin are detailed above under the heading “Gross margin.”61 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsGeneral and administrative expensesGeneral and administrative expenses were $30.1 million for the year ended December 31, 2017 and $33.1 millionfor the year ended December 31, 2016. During the year ended December 31, 2017, general and administrative expensesincluded allocated expenses of $14.6 million that were incurred under the MSA, $0.2 million related to developmentactivities prior to the Wilmington Drop-Down, $6.7 million of direct expenses, $5.0 million of non‑cash unit compensationexpense associated with unit‑based awards and $3.5 million related to acquisition transaction expenses. During the yearended December 31, 2016, we incurred $14.2 million under the MSA, $2.4 million and $7.0 million related to developmentactivities prior to the Wilmington Drop-Down and the Sampson Drop‑Down, respectively, $4.5 million of direct expenses,$4.2 million of non‑cash unit compensation expense associated with unit‑based awards, and $0.8 million of expenses relatedto acquisition transaction expenses.Disposal and impairment of assets held for saleDuring the year ended December 31, 2017, we recorded a loss on the sale of $0.8 million, net, upon deconsolidationof the Wiggins plant. For more information, please read “—Recent Developments—Sale of Wiggins Plant” above. During theyear ended December 31, 2016, we incurred a $10.0 million non-cash impairment charge related to the sale of the Wigginsplant.Interest expenseWe incurred $31.7 million of interest expense during the year ended December 31, 2017 and $15.6 million duringthe year ended December 31, 2016. The increase in interest expense from the prior year was primarily attributable to ourincrease in long‑term debt outstanding. Please read “—Senior Notes Due 2021” below.Related-party interest expenseOn December 11, 2015, under our Senior Secured Credit Facilities, we obtained incremental borrowings in theamount of $36.5 million and Enviva FiberCo, LLC, a wholly owned subsidiary of our sponsor (“FiberCo”), became a lenderwith the purchase of $15.0 million aggregate principal amount of the incremental borrowings. On June 30, 2016, FiberCoassigned all of its rights and obligations in its capacity as a lender to a third party. During 2016, we incurred $0.4 million ofrelated-party interest expense associated with this related-party debt. We did not incur related‑party interest expense during2017. Please read “—Senior Secured Credit Facilities” below.Early retirement of debt obligationWe incurred a $4.4 million charge during the year ended December 31, 2016 for the partial write‑off of debt issuancecosts and original issue discount associated with the existing Senior Secured Credit Facilities. The amounts were amortizedover the term of the debt and were expensed on December 14, 2016 when we repaid $158.1 million outstanding under theexisting Senior Secured Credit Facilities.Other (expense) incomeCertain cash flow hedges related to foreign currency exchange risk previously designated as hedges ceased toqualify for hedge accounting treatment and we discontinued hedge accounting for such hedge transactions on December 31,2017. A $1.6 million loss included in accumulated other comprehensive income was reclassified to other expense. 62 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsAdjusted EBITDA Year Ended December 31, 2017 2016(Recast) Change (in thousands)Reconciliation of adjusted EBITDA to net income: Net income $14,373 $13,463 $910Add: Depreciation and amortization 40,361 27,735 12,626Interest expense 31,744 16,221 15,523Early retirement of debt obligation — 4,438 (4,438)Non-cash unit compensation expense 5,014 4,230 784Asset impairments and disposals 5,726 12,377 (6,651)Changes in the fair value of derivative instruments 1,565 — 1,565Transaction expenses 3,598 827 2,771Adjusted EBITDA $102,381 $79,291 $23,090 We generated adjusted EBITDA of $102.4 million for the year ended December 31, 2017 compared to $79.3 millionfor the year ended December 31, 2016. The $23.1 million increase in adjusted EBITDA was attributable to the $16.7 millionincrease in adjusted gross margin described above and a decrease in general and administrative expenses primarilyattributable to the $2.4 million and $7.0 million of development activities related to the Wilmington terminal and Sampsonplant, respectively, incurred during 2016.Distributable cash flowThe following is a reconciliation of adjusted EBITDA to distributable cash flow: Year Ended December 31, 2017 2016(Recast) Change (in thousands)Adjusted EBITDA $102,381 $79,291 $23,090Less: Interest expense, net of amortization of debt issuance costs, debt premium andoriginal issue discount 30,297 14,329 15,968Maintenance capital expenditures 4,353 5,187 (834)Distributable cash flow attributable to Enviva Partners, LP 67,731 59,775 7,956Less: Distributable cash flow attributable to incentive distribution rights 3,398 1,077 2,321Distributable cash flow attributable to Enviva Partners, LP limited partners $64,333 $58,698 $5,635 63 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsYear Ended December 31, 2016 Compared to Year Ended December 31, 2015 Year Ended December 31, 2016(Recast) 2015(Recast) Change (in thousands)Product sales $444,489 $450,980 $(6,491)Other revenue 19,787 6,394 13,393Net revenue 464,276 457,374 6,902Cost of goods sold, excluding depreciation and amortization 357,418 365,061 (7,643)Loss on disposal of assets 2,386 2,081 305Depreciation and amortization 27,700 30,692 (2,992)Total cost of goods sold 387,504 397,834 (10,330)Gross margin 76,772 59,540 17,232General and administrative expenses 33,098 23,922 9,176Impairment of assets held for sale 9,991 — 9,991Total general and administrative expenses 43,089 23,922 19,167Income from operations 33,683 35,618 (1,935)Interest expense (15,643) (10,558) (5,085)Related-party interest expense (578) (1,154) 576Early retirement of debt obligation (4,438) (4,699) 261Other income (expense) 439 979 (540)Net income (loss) before income tax expense 13,463 20,186 (6,723)Income tax expense — 2,623 (2,623)Net income 13,463 17,563 (4,100)Less net loss attributable to noncontrolling partners’ interests 5,804 2,859 2,945Net income attributable to Enviva Partners, LP $19,267 $20,422 $(1,155) See Part II, Item 8. “Financial Statements and Supplementary Data—Note 13, Related-Party Transactions Product salesRevenue related to product sales (either produced by us or procured from a third party) were largely consistent forthe year ended December 31, 2016 as compared to the year ended December 31, 2015.Other revenueOther revenue increased to $19.8 million for the year ended December 31, 2016 compared to $6.4 million for theyear ended December 31, 2015. The $13.4 million increase was primarily attributable to the following:·A $7.2 million increase in fees received from third‑party pellet producers who had committed to purchaseshipments of wood pellets from us on a short‑term basis to meet volume, quality or sustainability commitmentsunder their customer contracts. The third‑party pellet producers cancelled shipments in return for make‑wholepayments.·A $4.4 million increase in fees earned for modifications to scheduled shipments as well as shipments purchasedfrom and sold to third‑party market participants, including, in some cases, our customers. These back‑to‑backtransactions, in which title and risk of loss immediately transferred to the ultimate purchasers, are presented on anet basis.·A $1.7 million increase for a payment received from a third‑party supplier as a result of its decision to terminatea short‑term wood pellet supply agreement.64 (1)(1)(1)(1)Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCost of goods soldCost of goods sold decreased to $387.5 million for the year ended December 31, 2016 from $397.8 million for theyear ended December 31, 2015. The $10.3 million decrease was primarily attributable to lower raw material and productioncosts and lower amortization expense as acquired customer contracts reach the end of their respective contract terms.Gross marginWe earned gross margin of $76.8 million and $59.5 million for the years ended December 31, 2016 and 2015,respectively. The gross margin increase of $17.2 million was primarily attributable to the following:·A $13.4 million increase in Other revenues as described above.·The favorable cost position of our wood pellets, excluding production from our Sampson plant, during the yearended December 31, 2016 as compared to the year ended December 31, 2015 increased gross margin by$4.9 million. The cost improvements primarily related to increased plant utilization, lower raw material costsand lower fuel costs that reduced our to‑port logistics costs for all plants during 2016 as compared to 2015.·A $3.0 million decrease in depreciation and amortization expense during the year ended December 31, 2016 ascompared to the year ended December 31, 2015 attributable to lower amortization expense as acquired customercontracts reach the end of their respective contract terms.Offsetting the above was:·A $1.8 million decrease in estimated incremental costs to deliver a shipment that we purchased back from acustomer and sold to another customer during the fourth quarter of 2016.·A $2.1 million decrease in gross margin due to the cost position of our Sampson plant during its first months ofproduction.Adjusted gross margin per metric ton Year Ended December 31, 2016(Recast) 2015(Recast) Change (in thousands except per metric ton)Metric tons sold 2,346 2,374 (28)Gross margin $76,772 $59,540 $17,232Loss on disposal of assets 2,386 2,081 305Depreciation and amortization 27,700 30,692 (2,992)Adjusted gross margin $106,858 $92,313 $14,545Adjusted gross margin per metric ton $45.55 $38.89 $6.66 We earned an adjusted gross margin of $106.9 million, or $45.55 per metric ton, for the year ended December 31,2016 and an adjusted gross margin of $92.3 million, or $38.89 per metric ton, for the year ended December 31, 2015. Thefactors impacting adjusted gross margin are detailed above under the heading “Gross margin.”General and administrative expensesGeneral and administrative expenses were $33.1 million for the year ended December 31, 2016 and $23.9 millionfor the year ended December 31, 2015. During the year ended December 31, 2016, general and administrative expensesincluded allocated expenses of $14.2 million that were incurred under the MSA, $2.4 and $7.0 million related todevelopment activities prior to the Wilmington Drop-Down and the Sampson Drop‑Down,65 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsrespectively, $4.5 million of direct expenses, $4.2 million of non‑cash unit compensation expense associated with unit‑basedawards and $0.8 million related to acquisition transaction expenses. During the year ended December 31, 2015, we incurred$16.2 million under the MSA, $0.6 million and $1.6 million related to development activities prior to the Wilmington Drop-Down and Sampson Drop‑Down, respectively, $3.6 million of direct expenses, $0.7 million of compensation expenseassociated with unit‑based awards, $0.4 million of accounting, legal and other expenses related to our Reorganizationactivities and $0.9 million of expenses related to acquisition transaction expenses.Impairment of assets held for saleDuring the year ended December 31, 2016, we incurred a $10.0 million non‑cash impairment charge related to thesale of the Wiggins plant.Interest expenseWe incurred $15.6 million of interest expense during the year ended December 31, 2016 and $10.6 million duringthe year ended December 31, 2015. On November 1, 2016, the proceeds from the Senior Notes were deposited into an escrowaccount pending completion of the Sampson Drop‑Down. On December 14, 2016, a portion of the proceeds, together withcash on hand, were used to repay a portion of the Senior Secured Credit Facilities. As a result, we incurred interest expense onboth the Senior Notes and the Senior Secured Credit Facilities during the escrow period. Please read “—Senior Notes Due2021” below.Related-party interest expenseWe incurred $0.6 million of related-party interest expense during the year ended December 31, 2016 and$1.2 million of related-party interest expense during the year ended December 31, 2015. On December 11, 2015, under ourSenior Secured Credit Facilities, we obtained incremental borrowings in the amount of $36.5 million. FiberCo became alender with the purchase of $15.0 million aggregate principal amount of the incremental borrowing advances. On June 30,2016, FiberCo assigned all of its rights and obligations in its capacity as a lender to a third party. During the year endedDecember 31, 2016, we incurred $0.4 million of related-party interest expense associated with this related-party debt.In connection with the January 5, 2015 acquisition of Cottondale (formerly owned by Green Circle), the sponsormade a term advance of $36.7 million to Cottondale under a revolving note and advanced Acquisition II $50.0 million undera note payable. Cottondale repaid $4.8 million of the outstanding principal of the term advance in March 2015. As a result ofthe sponsor’s contribution of Acquisition II, which owned Cottondale, to the Partnership on April 9, 2015, we recorded$81.9 million of outstanding principal and $0.9 million of accrued interest related to the term advance and note payable. Inconnection with the closing of the IPO on May 4, 2015, we repaid the term advance and note payable outstanding principalof $81.9 million and accrued interest of $1.1 million to the sponsor. We incurred $1.1 million of related-party interestexpense for the term advance and note payable for the year ended December 31, 2015.Early retirement of debt obligationWe incurred a $4.4 million charge during the year ended December 31, 2016 for the partial write‑off of debt issuancecosts and original issue discount associated with the existing Senior Secured Credit Facilities. The amounts were amortizedover the term of the debt and were expensed on December 14, 2016 when we repaid $158.1 million outstanding under theexisting Senior Secured Credit Facility.We incurred a $4.7 million charge during the year ended December 31, 2015 for the write‑off of debt issuance costsand original issue discount associated with the $120.0 million aggregate principal amount of senior secured credit facilities(the “Prior Senior Secured Credit Facilities”). The amounts were amortized over the term of the debt and were expensed onApril 9, 2015 when we repaid all amounts outstanding under the Prior Senior Secured Credit Facilities.66 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIncome tax expenseDuring the year ended December 31, 2016, we incurred no income tax expense. During the year ended December 31,2015, we incurred income tax expense of $2.7 million related to the separate activity of the Cottondale plant from the date ofacquisition on January 5, 2015 through April 8, 2015. During this period, Green Circle was a corporate subsidiary of thepredecessor entity of Acquisition II. Green Circle, which is now Cottondale, and Acquisition II were each treated ascorporations for federal income tax purposes until April 7, 2015 and April 8, 2015, respectively. Prior to the contribution ofAcquisition II to us on April 9, 2015, the financial results of the predecessor entity of each of Acquisition II and Green Circlewere included in the consolidated federal income tax return of the tax paying entity, Acquisition I.Adjusted EBITDA Year Ended December 31, 2016(Recast) 2015(Recast) Change (in thousands)Reconciliation of adjusted EBITDA to net income: Net income $13,463 $17,563 $(4,100)Add: Depreciation and amortization 27,735 30,738 (3,003)Interest expense 16,221 11,712 4,509Early retirement of debt obligation 4,438 4,699 (261)Purchase accounting adjustment to inventory — 697 (697)Non-cash unit compensation expense 4,230 704 3,526Income tax expense — 2,623 (2,623)Asset impairments and disposals 12,377 2,081 10,296Transaction expenses 827 893 (66)Adjusted EBITDA $79,291 $71,710 $7,581 We generated adjusted EBITDA of $79.3 million for the year ended December 31, 2016 compared to $71.7 millionfor the year ended December 31, 2015. The $7.6 million improvement in adjusted EBITDA was primarily attributable to the$14.5 million increase in adjusted gross margin discussed in further detail above. Offsetting the increase to adjusted grossmargin was a $7.3 million increase in general and administrative expenses related to development activities prior to theWilmington Drop-Down and the Sampson Drop‑Down as discussed above under “—General and administrative expenses.”Distributable cash flowThe following is a reconciliation of adjusted EBITDA to distributable cash flow: Year Ended December 31, 2016(Recast) 2015(Recast) Change (in thousands)Adjusted EBITDA $79,291 $71,710 $7,581Less: Interest expense, net of amortization of debt issuance costs, debt premium costsand original issue discount 14,329 10,106 4,223Maintenance capital expenditures 5,187 4,359 828Distributable cash flow to Enviva Partners, LP limited partners 59,775 57,245 2,530Less: Distributable cash flow attributable to incentive distribution rights 1,077 — 1,077Distributable cash flow attributable to Enviva Partners, LP limited partners $58,698 $57,245 $1,453 67 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsLiquidity and Capital ResourcesOverviewOur principal liquidity requirements for 2017 were to fund working capital, service our debt, maintain cash reserves,finance growth and maintenance capital expenditures, pay distributions and fund a portion of the Wilmington Drop‑Down.We met our liquidity needs in 2017 with a combination of funds generated through operations, net proceeds from the sales ofour additional Senior Notes, borrowings under our revolving credit commitments and proceeds from the sales of commonunits under our ATM Program.Our principal liquidity requirements for the year ended December 31, 2016 were to fund working capital, service ourdebt, maintain cash reserves, finance growth and maintenance capital expenditures, pay distributions and fund a portion ofthe Sampson Drop‑Down. We met our liquidity needs in 2016 with a combination of funds generated through operations, netproceeds from the Senior Notes Offering, borrowings under our revolving credit commitments and proceeds from the sales ofcommon units under our ATM Program.We expect our sources of liquidity to include cash generated from operations, borrowings under our revolving creditcommitments and, from time to time, debt and equity offerings, including under our ATM Program. We operate in acapital‑intensive industry, and our primary liquidity needs are to fund working capital, service our debt, maintain cashreserves, finance maintenance capital expenditures and pay distributions. We believe cash generated from our operations willbe sufficient to meet the short‑term working capital requirements of our business. However, future capital expenditures andother cash requirements could be higher than we currently expect as a result of various factors. Additionally, our ability togenerate sufficient cash from our operating activities depends on our future performance, which is subject to generaleconomic, political, financial, competitive and other factors beyond our control.Our minimum quarterly distribution is $0.4125 per common and subordinated unit per quarter, which equates toapproximately $10.9 million per quarter, or approximately $43.4 million per year, based on the number of common andsubordinated units outstanding as of February 16, 2018, to the extent we have sufficient cash from our operations afterestablishment of cash reserves and payment of fees and expenses. Because it is our intent to distribute at least the minimumquarterly distribution on all of our units on a quarterly basis, we expect that we will rely upon external financing sources,including bank borrowings and the issuance of debt and equity securities, to fund future acquisitions and expansions.Non‑Cash Working CapitalNon‑cash working capital is the amount by which current assets, excluding cash, exceed current liabilities and is ameasure of our ability to pay our liabilities as they become due. Our non‑cash working capital was $34.6 million at December31, 2017 and $45.9 million at December 31, 2016. The primary components of changes in non‑cash working capital were thefollowing:Accounts receivable, net and related-party receivablesAccounts receivable, net and related-party receivables decreased non‑cash working capital by $1.3 million duringthe year ended December 31, 2017 as compared to December 31, 2016. The decrease in accounts receivable was primarilyattributable to the number of shipments from our own production plants and shipments purchased and sold during December2017. Related-party receivables at December 31, 2017 included $4.9 million due from the First Hancock JV related to theSampson Drop-Down and the Wilmington Drop‑Down.InventoriesOur inventories consist of raw materials, work‑in‑process, consumable tooling and finished goods. Inventoriesdecreased to $23.5 million at December 31, 2017 from $29.9 million at December 31, 2016. The decrease in inventory wasattributable to a $5.5 million decrease in finished goods inventory due to the timing, volume and size of product shipmentsand a $3.2 million decrease in raw material inventories to support the reliability of our planned production68 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentslevels. The decrease in inventory was partially offset by a $2.3 million increase in consumable tooling and spare partsinventory.Assets held for saleAssets held for sale decreased $3.0 million at December 31, 2017. At December 2016, we initiated a plan to sell theWiggins plant and reflected $3.0 million as the carrying amount of the assets held for sale. We sold the Wiggins plant to athird-party buyer on December 27, 2017, and on December 28, 2017, Wiggins was dissolved and deconsolidated.Accounts payable, related-party payables, accrued liabilities and related-party accrued liabilitiesThe decrease in accounts payable, related-party payables, accrued liabilities and related-party accrued liabilities atDecember 31, 2017 as compared to December 31, 2016 increased non‑cash working capital by $3.1 million and wasprimarily attributable to a decrease in shipping and trading sales liabilities due to timing and volume of product shipments.Related-party payables at December 31, 2017 included $19.6 million related to the MSA, compared to $10.9 million relatedto the MSA at December 31, 2016. The increase is attributable to the timing of payments at year end.Current portion of interest payableAn increase in the current portion of interest payable at December 31, 2017 compared to December 31, 2016decreased non-cash working capital by $0.6 million. The current portion of interest payable is primarily related toaccrued interest on our Senior Notes. Please read “—Senior Notes Due 2021” below.Current portion of long-term debt and capital lease obligationsAn increase in the current portion of long-term debt and capital lease obligations at December 31, 2017 compared toDecember 31, 2016 decreased non-cash working capital by $2.0 million due to payments related to the Senior Secured CreditFacilities.Cash FlowsThe following table sets forth a summary of our net cash flows from operating, investing and financing activities forthe years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016(Recast) 2015(Recast) (in thousands)Net cash provided by operating activities $87,095 $55,804 $65,857Net cash used in investing activities (28,601) (111,124) (103,490)Net cash (used in) provided by financing activities (58,436) 53,658 39,173Net increase (decrease) in cash and cash equivalents $58 $(1,662) $1,540 Cash Provided by Operating ActivitiesNet cash provided by operating activities was $87.1 million, $55.8 million and $65.9 million for the years endedDecember 31, 2017, 2016 and 2015, respectively. The changes were primarily attributable to the following:·A $30.5 million favorable change in operating assets and liabilities during the year ended 2017 compared to2016 primarily attributable to a decrease in accounts receivable, net, related-party receivables and inventories.The favorable change was partially offset by a decrease in accounts payable, related-party69 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentspayables and accrued liabilities. The change was primarily attributable to the timing, volume and size ofproduct shipments.·A $14.9 million unfavorable change in operating assets and liabilities during the year ended 2016 compared to2015 primarily attributable to an increase in accounts receivable, net. The accounts receivable, net, increase wasdue to the number of shipments from our own production plants and shipments purchased and sold duringDecember 2016 combined with partially loaded shipments at the end of 2016 for which title and risk of loss hadpassed to the customer. The increase in accounts receivable, net, was partially offset by an increase in accruedexpenses primarily attributable to the aforementioned shipments and purchase and sale transactions.Cash Used in Investing ActivitiesNet cash used in investing activities was $28.6 million, $111.1 million and $103.5 million for the years endedDecember 31, 2017, 2016 and 2015, respectively. The cash used in investing activities from the year ended December 31,2016 and 2015 related primarily to the construction of the Sampson plant and Wilmington terminal. Of the $28.7 millionused for property, plant and equipment during the year ended December 31, 2017, approximately $5.7 million related toprojects intended to increase the production capacity of our plants and $4.4 million was used to maintain our equipment andmachinery. Of the remaining amount in 2017, $10.2 million was used for the construction of the Sampson plant and $8.4million was used for the construction of the Wilmington terminal.Cash (Used in) Provided by Financing ActivitiesNet cash (used in) provided by financing activities was $(58.4) million, $53.7 million and $39.2 million for theyears ended December 31, 2017, 2016 and 2015, respectively. Net cash used in financing activities during the year endedDecember 31, 2017 related primarily to distributions paid to our unitholders of $64.3 million, distributions to our sponsor of$55.9 million related to the Wilmington Drop-Down and $83.0 million of repayments, net, on our debt and capital leaseobligations. The net cash used in financing activities was partially offset by proceeds of $60.0 million from the additionalSenior Notes and $72.0 million of borrowings under our revolving credit commitments.Net cash provided by financing activities during the year ended December 31, 2016 related primarily to proceedsfrom the Partnership's Senior Notes offering and the Sampson Drop-Down. Net proceeds of $293.6 million from our SeniorNotes were used to repay debt, including $158.1 million due under the Senior Secured Credit Facilities and to distribute$139.6 million to our sponsor related to the Sampson Drop-Down.Net cash provided by financing activities during the year ended December 31, 2015 related primarily to borrowingsunder our Senior Secured Credit Facilities of $230.1 million and IPO proceeds of $215.1 million. Also contributing to netcash provided by financing activities were capital contributions made by the First Hancock JV prior to the Wilmington Drop-Down and the Sampson Drop-Down of $43.6 million and $62.0 million, respectively. These amounts were partially offset by$199.6 million of repayments, net, to our debt and capital lease obligations, $297.2 million in distributions to our sponsorand the payment of cash distributions to unitholders of $16.9 million.Senior Notes Due 2021On November 1, 2016, we and our wholly owned subsidiary, Enviva Partners Finance Corp. (together, the “Issuers”),Wilmington Trust, National Association, as trustee, and the guarantors thereto entered into an indenture, as amended orsupplemented (the “Indenture”), pursuant to which we issued $300.0 million in aggregate principal amount of Senior Notesto eligible purchasers (the “Senior Notes Offering”) in a private placement under the Securities Act, which resulted in netproceeds of $293.6 million after deducting expenses and underwriting discounts of $6.4 million. On December 14, 2016, aportion of the net proceeds from the Senior Notes, together with cash on hand and the issuance of $30.0 million in commonunits to the First Hancock JV, funded the consideration payable in connection with the Sampson Drop‑Down. The remainderof the net proceeds from the Senior Notes was used to repay certain outstanding term loan indebtedness under our SeniorSecured Credit Facilities. We were in compliance with the covenants and restrictions associated with, and no events ofdefault existed under, the Indenture as of December 31, 2017. The Senior70 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNotes are guaranteed jointly and severally, on a senior unsecured basis by substantially all of our existing subsidiaries andour future restricted subsidiaries that guarantee certain of our indebtedness. In August 2017, holders of 100% of the SeniorNotes tendered such notes in exchange for newly issued registered notes with terms substantially identical in all materialrespects to the Senior Notes (except that such registered notes are not subject to restrictions on transfer).On October 10, 2017, pursuant to the Indenture, the Issuers issued and sold an additional $55.0 million in aggregateprincipal amount of the Senior Notes to a purchaser (the “Additional Notes Purchaser”) at 106.25% of par value plus accruedinterest from May 1, 2017. The additional Senior Notes were issued pursuant to the Indenture and have the same terms as theSenior Notes. The sale of the additional Senior Notes resulted in gross proceeds to the Issuers of approximately $60.0 million.The proceeds were used to repay borrowings under the Partnership’s revolving credit commitments under the Senior SecuredCredit Facilities, which were used to fund the Wilmington Drop-Down, and for general partnership purposes.In December 2017, the Additional Notes Purchaser tendered such notes in exchange for newly issued registerednotes with terms substantially identical in all material respects to the Senior Notes (except that the registered notes are notsubject to restrictions on transfer). The additional Senior Notes will be treated together with the Senior Notes as a single classfor all purposes under the Indenture. We recorded $0.9 million in issue discounts and costs and $3.4 million in premiumsassociated with the issuance of the additional Senior Notes, which have been recorded as a net addition to long-term debt andcapital lease obligations.Senior Secured Credit FacilitiesOn April 9, 2015, we entered into the Credit Agreement providing for the Original Credit Facilities. The OriginalCredit Facilities consisted of (i) $99.5 million aggregate principal amount of Tranche A‑1 borrowings, (ii) $75.0 millionaggregate principal amount of Tranche A‑2 borrowings and (iii) up to $25.0 million aggregate principal amount of revolvingcredit commitments. We are also able to request loans under incremental facilities under the Credit Agreement on the termsand conditions and in the maximum aggregate principal amounts set forth therein, provided that lenders providecommitments to make loans under such incremental facilities.On December 11, 2015, we entered into the First Incremental Term Loan Assumption Agreement (the “AssumptionAgreement”) providing for the Incremental Term Borrowings under the Credit Agreement. The Incremental Term Borrowingsconsist of (i) $10.0 million aggregate principal amount of Tranche A‑3 borrowings and (ii) $26.5 million aggregate principalamount of Tranche A‑4 borrowings.On December 11, 2015, FiberCo became a lender pursuant to the Credit Agreement with a purchase of $15.0 millionaggregate principal amount of the Tranche A-4 borrowings, net of a 1.0% lender fee. On June 30, 2016, FiberCo assigned allof its rights and obligations in its capacity as a lender to a third party. The Partnership recorded $0 and $0.4 million asinterest expense related to this indebtedness during the three and nine months ended September 30, 2016, respectively.On October 17, 2016, we entered into the Second Amendment. The Second Amendment provided for an increase inthe revolving credit commitments under our Senior Secured Credit Facilities from $25.0 million to $100.0 million upon theconsummation of the Sampson Drop‑Down, the repayment of outstanding principal and accrued interest on the Tranche A‑2and Tranche A‑4 borrowings and the receipt of certain associated deliverables. On December 14, 2016, proceeds from the Senior Notes were used to repay all outstanding indebtedness, includingaccrued interest, in the amount of $74.7 million for Tranche A‑2 and $26.5 million for Tranche A‑4 under the SeniorSecured Credit Facilities and to repay a portion of the outstanding indebtedness, including accrued interest, in the amount of$53.6 million for Tranche A‑1 and $5.1 million for Tranche A‑3, under the Senior Secured Credit Facilities. For the yearended December 31, 2017, the Partnership recorded a $4.4 million loss on early retirement of debt obligations related to therepayments.71 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsThe Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilitiesbear interest, at our option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00% floor for termloan borrowings) plus an applicable margin. Principal and interest are payable quarterly.We had $4.0 million outstanding under the letter of credit facility as of December 31, 2017. The letter of credit wasissued in connection with a contract between us and a third party, in the ordinary course of business. The amount required tobe secured with the letter of credit under the contract may be adjusted or cancelled based on the specific third‑party contractterms. The amount outstanding as of December 31, 2017 is subject to automatic extensions through the termination date ofthe letter of credit facility. The letter of credit is not cash collateralized, and there are no unreimbursed drawings under theletter of credit as of December 31, 2017. On January 11, 2018, the letter of credit was cancelled as it was no longercontractually required.The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, achange of control restriction and limitations on our ability to (i) incur indebtedness, (ii) pay dividends or make otherdistributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens,(vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to third partiesor unrestricted subsidiaries. An event of default could result in the acceleration of our obligation to repay our borrowings andmay cause a net settlement of our derivative instruments with the respective counterparties. We will be restricted frommaking distributions if an event of default exists under the Credit Agreement or if the interest coverage ratio (determined asthe ratio of consolidated EBITDA, as defined in the Credit Agreement, to consolidated interest expense, determinedquarterly) is less than 2.25:1.00 at such time.Pursuant to the Credit Agreement, we are required to maintain, as of the last day of each fiscal quarter, a ratio of totaldebt to consolidated EBITDA (“Total Leverage Ratio”), as defined in the Credit Agreement, of not more than a maximumratio, initially set at 4.25:1.00 and stepping down to 3.75:1.00 during the term of the Credit Agreement; provided that themaximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation of certainqualifying acquisitions through the end of the second full fiscal quarter thereafter.As of December 31, 2017, our Total Leverage Ratio was 3.67:1.00, as calculated in accordance with the CreditAgreement, which was less than the maximum ratio of 4.75:1.00. As of December 31, 2017, we were in compliance with allcovenants and restrictions associated with, and no events of default existed under, the Credit Agreement. Our obligationsunder the Credit Agreement are guaranteed by certain of our subsidiaries and secured by liens on substantially all of our andtheir assets.At‑the‑Market Offering ProgramOn August 8, 2016, we filed a prospectus supplement to our shelf registration filed with the SEC on June 24, 2016,for the registration of the continuous offering of up to $100.0 million of common units, in amounts, at prices, and on terms tobe determined by market conditions and other factors at the time of our offerings. In August 2016, we also entered into theEquity Distribution Agreement with certain managers pursuant to which we may offer and sell common units from time totime through or to one or more of the managers, subject to the terms and conditions set forth in the Equity DistributionAgreement, of up to an aggregate sales amount of $100.0 million.During the year ended December 31, 2017, we sold 71,368 common units under the Equity Distribution Agreementfor net proceeds of $1.9 million, net of an insignificant amount of commissions. Accounting and other fees of approximately$0.2 million were offset against the proceeds during 2017. Net proceeds from sales under the ATM Program were used forgeneral partnership purposes. As of February 16, 2018, $88.6 million remained available for issuance under the ATMProgram.72 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsContractual ObligationsThe following table presents our contractual obligationsand other commitments as of December 31, 2017: 2023 andContractual Obligations Total 2018 2019 - 2020 2021 - 2022 Beyond (in thousands)Long-term debt(1) $399,756 $4,927 $39,829 $355,000 $ —Other loans and capital leases 5,158 3,283 1,382 493 —Operating leases 76,087 3,737 5,567 5,258 61,525Interest expense(2) 123,794 33,171 64,430 26,193 —Purchase obligations(3) 3,514 3,514 — — —Shipping commitments (4) 443,584 58,690 115,194 117,479 152,221Other purchase commitments(5) 202,971 31,034 74,371 90,992 6,574 $1,254,864 $138,356 $300,773 $595,415 $220,320 (1)Our long‑term debt as of December 31, 2017 consisted of $352.2 million of outstanding indebtedness, increased by apremium of $3.2 million and offset by an unamortized discount and debt issuance costs of $6.0 million, under ourSenior Notes, and $43.6 million of outstanding indebtedness, offset by an unamortized discount and debt issuance costsof $1.1 million, under our Senior Secured Credit Facilities.(2)The cash obligations for interest expense reflect, as of December 31, 2017, (i) interest expense related to $355.0 millionof Senior Notes bearing interest at 8.50%, $43.0 million of Tranche A‑1 advances and $4.75 million of Tranche A‑3advances bearing interest at a Eurodollar rate (with a 1.00% floor) plus an applicable margin, adjusted for thePartnership’s pay‑fixed, receive‑variable interest rate swap, and (ii) interest expense related to the Amory Note, whichbears interest at a rate of 6.0%.(3)At December 31, 2017, we had $3.5 million of purchase obligations which consisted of commitments for the purchase ofmaterials, supplies and the engagement of services for the operation of our plants and facilities to be used in the normalcourse of business. The amounts presented in the table do not include items already recorded in accounts payable oraccrued liabilities at December 31, 2017.(4)In order to mitigate volatility in our shipping costs, we have entered into fixed‑price shipping contracts with reputableshippers matching the terms and volumes of certain of our off‑take contracts for which we are responsible for arrangingshipping. Our contracts with shippers include provisions as to the minimum amount of metric tons per year to beshipped and may also stipulate the number of shipments. Pursuant to these contracts, the terms extend to up to fifteenyears, charges are based on a fixed‑price per metric ton and, in some cases, there are adjustment provisions for increasesin the price of fuel or for other distribution‑related costs. The price per metric ton may also vary depending on theloading port and the discharge port. Our shippers commit their resources based on our planned shipments, and we wouldlikely be liable for a portion of their expenses if we deviated from our communicated plans. As of December 31, 2017,we estimate our obligations related to these shipping contracts to be approximately $444.0 million through 2026. Theseamounts will be offset by the related sales transactions in the same period, which are not included in the table above.(5)Purchase and other commitments consist primarily of commitments under certain wood fiber and wood pellet purchases,handling and terminal and stevedoring service contracts. Some of our suppliers and service providers commit resourcesbased on our planned purchases and require minimum levels of commitments. One supply agreement for the purchase of720,000 MT of wood pellets from British Columbia is fully offset by an agreement to sell 720,000 MT of wood pelletsto the same counterparty from our terminal locations. The amounts in the table represent an estimate of the costs wewould incur under these contracts as of December 31, 2017. Many of our contracts are requirement contracts andcurrently do not represent a firm commitment to purchase from our suppliers; therefore, they are not reflected in the tableabove. Under these contracts, we may be liable for the costs incurred on services rendered until termination and the costsof any supplies on hand.73 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOff‑Balance Sheet ArrangementsAs of December 31, 2017, we did not have any off‑balance sheet arrangements, as defined in Item 303(a)(4)(ii) ofRegulation S‑K, such as the use of unconsolidated subsidiaries, structured finance, special purpose entities or variableinterest entities.Recently Issued Accounting PronouncementsSee Note 3, “Significant Accounting Policies —Recent and Pending Accounting Pronouncements,” in the Notes toour Consolidated Financial Statements included in this Annual Report on Form 10-K for a description of recently issued andadopted accounting pronouncements.Critical Accounting Policies and EstimatesThe discussion and analysis of our financial condition and results of operations is based on our consolidatedfinancial statements, which have been prepared in accordance with accounting principles generally accepted in the UnitedStates of America. The preparation of these consolidated financial statements requires us to make estimates and assumptionsthat affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates ofthe consolidated financial statements and the reported revenues and expenses during the reporting periods. We evaluatethese estimates and assumptions on an ongoing basis and base our estimates on historical experience, current conditions andvarious other assumptions that we believe to be reasonable under the circumstances. The results of these estimates form thebasis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing theaccounting treatment with respect to commitments and contingencies. Our actual results may materially differ from theseestimates.Listed below are accounting policies we believe are critical to our consolidated financial statements due to thedegree of uncertainty regarding the estimates or assumptions involved, which we believe are critical to the understanding ofour operations.Revenue RecognitionWe primarily earn revenue by supplying wood pellets to our customers under off‑take contracts, the majority of thecommitments under which are long‑term in nature. We refer to the structure of our contracts as “take‑or‑pay” because theyinclude a firm obligation of the customer to take a fixed quantity of product at a stated price and provisions that ensure wewill be compensated in the case of a customer’s failure to accept all or a part of the contracted volumes or for termination by acustomer. Each contract defines the annual volume of wood pellets that a customer is required to purchase and we arerequired to sell, the fixed price per metric ton for product satisfying a base net calorific value and other technicalspecifications. These prices are fixed for the entire term, subject to annual inflation‑based adjustments and price escalators, aswell as, in some instances, price adjustments for product specifications and changes in underlying costs. In addition to salesof our product under these long‑term, take‑or‑pay contracts, we routinely sell wood pellets under shorter‑term contracts,which range in volume and tenor and, in some cases, may include only one specific shipment. Because each of our contractsis a bilaterally negotiated agreement, our revenue over the duration of these contracts does not generally follow spot marketpricing trends. Our revenue from the sale of wood pellets is recognized when the goods are shipped, title and risk of losspasses to the customer, the sales price to the customer is fixed and determinable, and collectability is reasonably assured.Depending on the specific off‑take contract, shipping terms are either CIF, CFR or FOB. Under a CIF contract, weprocure and pay for shipping costs, which include insurance and all other charges, up to the port of destination for thecustomer. Under a CFR contract, we procure and pay for shipping costs, which include insurance (excluding marine cargoinsurance) and all other charges, up to the port of destination for the customer. Shipping costs under CIF and CFR contractsare included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under FOB contracts,the customer is directly responsible for shipping costs. Our customer shipping terms, as well as the timing and size ofshipments during the year, can result in material fluctuations in our revenue recognition between periods but generally havelittle impact on gross margin.74 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIn some cases, we may purchase shipments of product from a third‑party supplier and resell them in back‑to‑backtransactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from thesetransactions is recorded net of costs paid to the third‑party supplier. We record this revenue as “Other revenue.”In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may paya fee, including reimbursement of any incremental costs incurred by us, which is included in “Other revenue.”Other revenue also includes third- and related-party terminal services fees.Cost of Goods SoldCost of goods sold includes the costs to produce and deliver our wood pellets to customers. The principal expensesincurred to produce and deliver our wood pellets consist of raw material, production and distribution costs.We have strategically located our plants in the Southeastern United States, a region with plentiful wood fiberresources. We manage the supply of raw materials into our plants primarily through short‑term contracts. Delivered woodfiber costs include stumpage as well as harvesting, transportation and, in some cases, size reduction services provided by oursuppliers. The majority of our product volumes are sold under long-term off-take contracts that include cost pass‑throughmechanisms to mitigate increases in raw material and distribution costs.Production costs at our production plants consist of labor, energy, tooling, repairs and maintenance and plantoverhead costs. Production costs also include depreciation expense associated with the use of our plants and equipment andany gain or loss on disposal of associated assets. Some of our off‑take contracts include price escalators that mitigateinflationary pressure on certain components of our production costs. In addition to the wood pellets that we produce at ourowned and operated production plants, we selectively purchase additional quantities of wood pellets from third‑party woodpellet producers.Distribution costs include all transportation costs from our plants to our port locations, any storage or handling costswhile the product remains at port and shipping costs related to the delivery of our product from our port locations to ourcustomers. Both the strategic location of our plants and our ownership or control of our marine terminals has allowed for theefficient and cost‑effective transportation of our wood pellets. We seek to mitigate shipping risk by entering into long‑term,fixed‑price shipping contracts with reputable shippers matching the terms and volumes of our off‑take contracts pursuant towhich we are responsible for arranging shipping. Certain of our off‑take contracts include pricing adjustments for volatilityin fuel prices, which allows us to pass the majority of the fuel price risk associated with shipping through to our customersunder those contracts.Additionally, as deliveries are made, we amortize the purchase price of acquired customer contracts that wererecorded as intangible assets during the applicable contract term.Raw material, production and distribution costs associated with delivering our wood pellets to our owned andleased marine terminals and related- and third‑party wood pellet purchase costs are capitalized as a component of inventory.Fixed production overhead, including the related depreciation expense, is allocated to inventory based on the normalcapacity of the facilities. These costs are reflected in cost of goods sold when inventory is sold. Distribution costs associatedwith shipping our wood pellets to our customers and amortization of favorable acquired customer contracts are expensed asincurred. Our inventory is recorded using FIFO, which requires the use of judgment and estimates. Given the nature of ourinventory, the calculation of cost of goods sold is based on estimates used in the valuation of the FIFO inventory and indetermining the specific composition of inventory that is sold to each customer.Property, Plant and EquipmentProperty, plant and equipment are recorded at cost, which includes the fair values of assets acquired. Equipmentunder capital leases is stated at the present value of minimum lease payments. Useful lives of assets are based on historicalexperience and are adjusted when changes in the expected physical life of the asset, its planned use,75 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentstechnological advances or other factors show that a different life would be more appropriate. Changes in useful lives arerecognized prospectively.Depreciation is calculated using the straight‑line method based on the estimated useful lives of the related assets.Plant and equipment held under capital leases are amortized on a straight‑line basis over the shorter of the lease term orestimated useful life of the asset.Construction in progress primarily represents expenditures for the development and expansion of facilities.Capitalized interest cost and all direct costs, which include equipment and engineering costs related to the development andexpansion of facilities, are capitalized as construction in progress. Depreciation is not recognized for amounts in constructionin progress.Normal repairs and maintenance costs are expensed as incurred. Amounts incurred that extend an asset’s useful life,increase its productivity or add production capacity are capitalized. Direct costs, such as outside labor, materials, internalpayroll and benefits costs incurred during the construction of a new plant are capitalized; indirect costs are not capitalized.Repairs and maintenance costs were $21.4 million, $15.9 million and $12.3 million for the years ended December 31, 2017,2016 and 2015, respectively.Asset Impairment AssessmentsLong‑Lived AssetsLong‑lived assets, such as property, plant and equipment and amortizable intangible assets, are tested forimpairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. If circumstances require that a long‑lived asset or asset group be tested for possible impairment, we first compareundiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’s carrying value. Ifthe carrying value of the long‑lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairmentis recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuationtechniques including discounted cash flow models, quoted market values and third‑party independent appraisals, asconsidered necessary.In December 2016, the Partnership recorded an impairment of $10.0 million related to the fixed assets at theWiggins plant. For more information, please read “—Recent Developments—Sale of the Enviva Wiggins Plant”above. The Partnership did not record any impairments for the years ended December 31, 2015 and 2014 (see PartII, Item 8. “Financial Statements and Supplementary Data—Note 10, Goodwill and Other Intangible Assets). [Bill:why do we use numbers here. We don’t for other items above]GoodwillGoodwill represents the purchase price paid for acquired businesses in excess of the identifiable acquired assets andassumed liabilities. Goodwill is not amortized, but is tested for impairment annually on December 1 and whenever an eventoccurs or circumstances change such that it is more likely than not that the fair value of the reporting unit is less than itscarrying amounts. At December 31, 2017 and 2016, the Partnership identified one reporting unit that corresponded to thePartnership’s one segment and selected the fourth fiscal quarter to perform its annual goodwill impairment test.The Partnership first performs a qualitative assessment to determine whether it is necessary to perform quantitativetesting. If this initial qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit ismore than its carrying value, goodwill is not considered impaired and the Partnership is not required to perform the two‑stepimpairment test. Qualitative factors considered in this assessment include (i) macroeconomic conditions, (ii) past, current andprojected future financial performance, (iii) industry and market considerations, (iv) changes in the costs of raw materials,fuel and labor and (v) entity‑specific factors such as changes in management or customer base.If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, thePartnership will perform a two‑step impairment test. Under the first step, the fair value of the reporting unit is compared withits carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two does notneed to be performed.76 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsIf the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists forthe reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairmentloss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of thatgoodwill.For the years ended December 31, 2017 and 2016, the Partnership applied the qualitative test and determined that itwas more likely than not that the estimated fair value of the reporting unit substantially exceeded the related carrying value,and, accordingly, was not required to apply the two‑step impairment test. The Partnership did not record any goodwillimpairment for the years ended December 31, 2017 and 2016 (see Note 10, Goodwill and Other Intangible Assets). ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKMarket risk is the risk of loss arising from adverse changes in market rates and prices. Historically, our risks havebeen predominantly related to potential changes in the fair value of our long‑term debt due to fluctuations in applicablemarket interest rates. Our market risk exposure is expected to be limited to risks that arise in the normal course of business, aswe do not engage in speculative, non‑operating transactions, nor do we use financial instruments or derivative instrumentsfor trading purposes.Interest Rate RiskAt December 31, 2017, our total debt had a carrying value of $401.0 million and fair value of $423.4 million.Although we seek to mitigate our interest rate risk through interest rate swaps (as discussed below), we are exposedto fluctuations in interest rates on borrowings under the Senior Secured Credit Facilities. Borrowings under the SeniorSecured Credit Facilities bear interest, at our option, at either a base rate plus an applicable margin or at a Eurodollar rate(with a 1.00% floor for term loan borrowings) plus an applicable margin.The applicable margin is (i) for Tranche A‑1 and Tranche A‑3 base rate borrowings, 2.95% through April 2018 and2.80% thereafter, (ii) for Tranche A‑1 and Tranche A‑3 Eurodollar rate borrowings, 3.95% through April 2018 and 3.80%thereafter, (iii) for revolving facility base rate borrowings, 3.25%, and (iv) for revolving facility Eurodollar rate borrowings,4.25%. We repaid in full the outstanding principal and accrued interest on the Tranche A‑2 and Tranche A‑4 borrowingsupon the consummation of the Sampson Drop‑Down. As of December 31, 2017, $43.6 million, net of unamortized discountof $1.1 million, of Tranche A‑1 and Tranche A‑3 borrowings remained outstanding under our Senior Secured CreditFacilities.In September 2016, we entered into a pay‑fixed, receive‑variable interest rate swap agreement to fix our exposure tofluctuations in London Interbank Offered Rate-based interest rates (the “interest rate swap”). The interest rate swapcommenced on September 30, 2016 and expires concurrently with the maturity of the Senior Secured Credit Facilities inApril 2020. We elected to discontinue hedge accounting as of December 14, 2016 following repayment of a portion of ouroutstanding indebtedness under the Senior Secured Credit Facilities, and subsequently re-designated the interest rate swapfor the remaining portion of such indebtedness during the year ended December 31, 2017. We enter into derivativeinstruments to manage cash flow. We do not enter into derivative instruments for speculative or trading purposes. Thecounterparty to our interest rate swap agreement is a major financial institution. As a result, we have no significant interestrate risk on our Tranche A‑1 and Tranche A‑3 borrowings as of December 31, 2017.There can be no assurance that our interest rate risk‑management practices, if any, will eliminate or substantiallyreduce risks associated with fluctuating interest rates. For more information, please read Part I, Item 1A “Risk Factors—Ourexposure to risks associated with foreign currency and interest rate fluctuations, as well the hedging arrangements we mayenter into to mitigate those risks, could have an adverse effect on our financial condition and results of operations.”77 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsCredit RiskSubstantially all of our revenue was from long‑term, take‑or‑pay off‑take contracts with three customers for the yearsended December 31, 2017 and 2015, and two customers for the year ended December 31, 2016. Most of our customers aremajor power generators in Europe. This concentration of counterparties operating in a single industry and geographic areamay increase our overall exposure to credit risk, in that the counterparties may be similarly affected by changes in economic,political, regulatory or other conditions. If a customer defaults or if any of our contracts expire in accordance with their terms,and we are unable to renew or replace these contracts, our gross margin and cash flows and our ability to make cashdistributions to our unitholders may be adversely affected. Although we have entered into hedging arrangements in order tominimize our exposure to fluctuations in foreign currency exchange and interest rates, our derivatives also expose us tocredit risk to the extent that counterparties may be unable to meet the terms of our hedging agreements. For moreinformation, please read Part I, Item 1A “Risk Factors—Our exposure to risks associated with foreign currency and interestrate fluctuations, as well the hedging arrangements we may enter into to mitigate those risks, could have an adverse effecton our financial condition and results of operations and —Substantially all of our revenues currently are generated undercontracts with four customers, and the loss of any of them could adversely affect our business, financial condition, results ofoperations, cash flows and ability to make cash distributions. We may not be able to renew or obtain new and favorablecontracts with these customers when our existing contracts expire, which could adversely affect our revenues andprofitability.” Foreign Currency Exchange RiskWe primarily are exposed to fluctuations in foreign currency exchange rates related to contracts pursuant to whichdeliveries of wood pellets will be settled in British Pound Sterling (“GBP”). Deliveries under the Lynemouth Contract beganin late 2017 and deliveries under the EVA-MGT Contract and the 95,000 MTPY contract with the First Hancock JV begin in2019. We have entered into forward contracts and purchased options to hedge a portion of our forecasted revenue for thesecustomer contracts. We have designated and accounted for the forward contracts and purchased options as cash flow hedgesof anticipated GBP-denominated revenue and, therefore, the effective portion of the changes in fair value on theseinstruments will be recorded as a component of accumulated other comprehensive income in partners’ capital and will bereclassified to revenue in the consolidated statements of income in the same period in which the underlying revenuetransactions occur. During December 2017, we determined that certain transactions were no longer probable of occurringwithin the forecasted time period. We discontinued hedge accounting and a $1.6 million loss included in othercomprehensive income related to these hedging relationships was reclassified to other expense on the consolidatedstatements of income.As of December 31, 2017, we had notional amounts of 46.5 million GBP under foreign currency forward contractsand 34.1 million GBP under foreign currency purchased options that expire between 2018 and 2022. At December 31, 2017,the unrealized loss associated with foreign currency forward contracts and foreign currency purchased options ofapproximately $2.1 million and $1.2 million, respectively, are included in other comprehensive income.We do not utilize foreign exchange contracts for speculative or trading purposes. The counterparties to our foreignexchange contracts are major financial institutions. There can be no assurance that our hedging arrangements or other foreignexchange rate risk‑management practices, if any, will eliminate or substantially reduce risks associated with our exposure tofluctuating foreign exchange rates. For more information, please read Part I, Item 1A “Risk Factors—Our exposure to risksassociated with foreign currency and interest rate fluctuations, as well the hedging arrangements we may enter into tomitigate those risks, could have an adverse effect on our financial condition and results of operations.”78 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAINDEX TO FINANCIAL STATEMENTSENVIVA PARTNERS, LP AND SUBSIDIARIESReport of Independent Registered Public Accounting Firm 80Consolidated Balance Sheets 81Consolidated Statements of Income 82Consolidated Statements of Comprehensive Income 83Consolidated Statements of Changes in Partners’ Capital 84Consolidated Statements of Cash Flows 85Consolidated Statements of Cash Flows (continued) 86Notes to Consolidated Financial Statements 87 79 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsReport of Independent Registered Public Accounting FirmThe Unitholders and Board of DirectorsEnviva Partners, LP:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Enviva Partners, LP and subsidiaries (the “Partnership”)as of December 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income, changes inpartners’ capital, and cash flows for each of the years in the three‑year period ended December 31, 2017, and the related notes(collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, inall material respects, the financial position of the Partnership as of December 31, 2017 and 2016, and the results of itsoperations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity withU.S. generally accepted accounting principles.Basis for OpinionThese consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is toexpress an opinion on these consolidated financial statements based on our audits. We are a public accounting firmregistered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to beindependent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the consolidated financial statements are free of materialmisstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an auditof its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internalcontrol over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership’sinternal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financialstatements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures includedexamining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Ouraudits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonablebasis for our opinion.(signed) KPMG LLPWe have served as the Partnership’s auditor since 2010McLean, VirginiaFebruary 22, 2018 80 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESConsolidated Balance SheetsDecember 31, 2017 and 2016(In thousands, except number of units) 2016 2017 (Recast) Assets Current assets: Cash and cash equivalents $524 $466Accounts receivable, net of allowance for doubtful accounts of $0 as of December 31, 2017and $24 as of December 31, 2016 79,185 77,868Related-party receivables 5,412 8,056Inventories 23,536 29,936Assets held for sale — 3,044Prepaid expenses and other current assets 1,006 1,979Total current assets 109,663 121,349 Property, plant and equipment, net of accumulated depreciation of $117.1 million as ofDecember 31, 2017 and $80.8 million as of December 31, 2016 562,330 590,916Intangible assets, net of accumulated amortization of $10.3 million as of December 31, 2017 and$9.1 million as of December 31, 2016 109 1,371Goodwill 85,615 85,615Other long-term assets 2,394 2,125Total assets $760,111 $801,376 Liabilities and Partners’ Capital Current liabilities: Accounts payable $7,554 $9,993Related-party payables 26,398 11,472Accrued and other current liabilities 29,363 44,531Related-party accrued liabilities — 382Current portion of interest payable 5,029 4,414Current portion of long-term debt and capital lease obligations 6,186 4,165Total current liabilities 74,530 74,957Long-term debt and capital lease obligations 394,831 346,915Related-party long-term payable 74,000 —Long-term interest payable 890 770Other long-term liabilities 5,491 1,872Total liabilities 549,742 424,514Commitments and contingencies Partners’ capital: Limited partners: Common unitholders—public (13,073,439 and 12,980,623 units issued and outstanding atDecember 31, 2017 and December 31, 2016, respectively) 224,027 239,902Common unitholder—sponsor (1,347,161 units issued and outstanding at December 31, 2017and December 31, 2016) 16,050 18,197Subordinated unitholder—sponsor (11,905,138 units issued and outstanding atDecember 31, 2017 and December 31, 2016) 101,901 120,872General partner (no outstanding units) (128,569) (40,713)Accumulated other comprehensive (loss) income (3,040) 595Total Enviva Partners, LP partners’ capital 210,369 338,853Noncontrolling partners’ interests — 38,009Total partners’ capital 210,369 376,862Total liabilities and partners’ capital $760,111 $801,376 See accompanying notes to consolidated financial statements. 81 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESConsolidated Statements of IncomeYears ended December 31, 2017, 2016 and 2015(In thousands, except per unit amounts) 2016 2015 2017 (Recast) (Recast) Product sales $522,250 $444,489 $450,980Other revenue 20,971 19,787 6,394Net revenue 543,221 464,276 457,374Cost of goods sold, excluding depreciation and amortization 419,616 357,418 365,061Loss on disposal of assets 4,899 2,386 2,081Depreciation and amortization 39,904 27,700 30,692Total cost of goods sold 464,419 387,504 397,834Gross margin 78,802 76,772 59,540General and administrative expenses 30,107 33,098 23,922Disposal and impairment of assets held for sale 827 9,991 —Total general and administrative expenses 30,934 43,089 23,922Income from operations 47,868 33,683 35,618Other income (expense): Interest expense (31,744) (15,643) (10,558)Related-party interest expense — (578) (1,154)Early retirement of debt obligation — (4,438) (4,699)Other (expense) income (1,751) 439 979Total other expense, net (33,495) (20,220) (15,432)Income before income tax expense 14,373 13,463 20,186Income tax expense — — 2,623Net income 14,373 13,463 17,563Less net loss attributable to noncontrolling partners’ interests 3,140 5,804 2,859Net income attributable to Enviva Partners, LP $17,513 $19,267 $20,422Less: Predecessor loss to May 4, 2015 (prior to IPO) $ — $ — $(2,132)Less: Pre-acquisition income from April 10, 2015 to December 10, 2015 from operationsof Enviva Pellets Southampton, LLC Drop-Down allocated to General Partner — — 6,264Less: Pre-acquisition loss from inception to December 13, 2016 from operations of EnvivaPellets Sampson, LLC Drop-Down allocated to General Partner — (3,231) (1,815)Less: Pre-acquisition loss from inception to October 1, 2017 from operations of EnvivaPort of Wilmington, LLC Drop-Down allocated to General Partner (3,049) (2,110) (937)Enviva Partners, LP limited partners’ interest in net income $20,562 $24,608 $19,042Net income per limited partner common unit: Basic $0.65 $0.95 $0.80Diluted $0.61 $0.91 $0.79Net income per limited partner subordinated unit: Basic $0.65 $0.93 $0.80Diluted $0.65 $0.93 $0.79Weighted-average number of limited partner units outstanding: Common—basic 14,403 13,002 11,988Common—diluted 15,351 13,559 12,258Subordinated—basic and diluted 11,905 11,905 11,905 See Note 13, Related-Party Transactions See accompanying notes to consolidated financial statements.182 (1)(1)(1)(1) Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESConsolidated Statements of Comprehensive IncomeYears ended December 31, 2017, 2016, 2015(In thousands) 2016 2015 2017 (Recast) (Recast) Net income $14,373 $13,463 $17,563Other comprehensive loss: Net unrealized losses on cash flow hedges (5,463) (246) —Reclassification of net losses realized into net income 1,828 — —Total other comprehensive loss (3,635) (246) —Total comprehensive income 10,738 13,217 17,563Less: Predecessor loss prior to IPO — — (2,132)Pre-acquisition income from April 10, 2015 to December 10, 2015 fromoperations of Enviva Pellets Southampton, LLC Drop-Down allocated toGeneral Partner — — 6,264Pre-acquisition loss from inception to December 13, 2016 from operations ofEnviva Pellets Sampson, LLC Drop-Down allocated to General Partner — (3,231) (1,815)Pre-acquisition loss from inception to October 1, 2017 from operations ofEnviva Port of Wilmington, LLC Drop-Down allocated to General Partner (3,049) (2,110) (937)Total comprehensive income subsequent to IPO, Enviva Pellets Southampton,LLC Drop-Down, Enviva Pellets Sampson, LLC Drop-Down and Enviva Port ofWilmington, LLC Drop-Down 13,787 18,558 16,183Less: Comprehensive loss attributable to noncontrolling partners’ interests (3,140) (5,804) (2,859)Comprehensive income attributable to Enviva Partners, LP partners $16,927 $24,362 $19,042 See accompanying notes to consolidated financial statements. 83 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESConsolidated Statements of Changes in Partners’ CapitalYears ended December 31, 2017, 2016 and 2015(In thousands) Limited Partners’ Capital Common Common Subordinated Accumulated General Units— Units— Units— Other Non- Total Net Parent Partner Public Sponsor Sponsor Comprehensive controlling Partners' Investment Interest Units Amount Units Amount Units Amount Income Interests CapitalPartners' capital December 31, 2014 (Recast) 271,495 (1,661) — — — — — — — 7,780 277,614Contribution of Enviva Cottondale Acquisition II, LLC 132,765 — — — — — — — — — 132,765Expenses incurred by sponsor 3,088 — — — — — — — — — 3,088Net proceeds from IPO, net of deferred IPO costs — — 11,500 208,911 — — — — — — 208,911Distribution to sponsor associated with IPO (176,702) — — — — — — — — — (176,702)Allocation of net Parent investment to sponsor (228,514) — — — 405 7,518 11,905 220,996 — — —Distribution to sponsor associated with Enviva PelletsSouthampton, LLC Drop-Down — (46,637) — — — (3,015) — (88,681) — — (138,333)Issuance of units associated with Enviva PelletsSouthampton, LLC Drop-Down — — — — 942 15,000 — — — — 15,000Issuance of units through Long-Term Incentive Plan — — 3 42 — — — — — — 42Distributions to unitholders and distribution equivalentrights — — — (8,287) — (285) — (8,369) — — (16,941)Non-cash Management Services Agreement expenses — — — 662 — — — — — — 662Contribution of Enviva Pellets Sampson, LLC — 35,433 — — — — — — — 36,267 71,700Contribution of Enviva Port of Wilmington, LLC — 12,997 — — — — — — — 13,304 26,301Net (loss) income (2,132) 3,512 — 9,160 — 401 — 9,481 — (2,859) 17,563Balance as of December 31, 2015 (Recast) — 3,644 11,503 210,488 1,347 19,619 11,905 133,427 — 54,492 421,670Cash distributions — (716) — (24,779) — (2,729) — (24,107) — — (52,331)Issuance of units associated with Enviva Pellets Sampson,LLC Drop-Down — — 1,098 30,000 — — — — — — 30,000Issuance of units through Long-Term Incentive Plan — — 21 411 — — — — — — 411Issuance of common units, net — — 359 8,929 — — — — — — 8,929Non-cash Management Services Agreement expenses — — — 3,820 — — — — — — 3,820Contribution of Enviva Pellets Sampson, LLC — 95,391 — — — — — — — (33,759) 61,632Distribution to sponsor — (138,505) — — — — — — — — (138,505)Excess consideration over Enviva Pellets Sampson, LLCnet assets — (18,534) — — — — — — — — (18,534)Contribution of Enviva Port of Wilmington, LLC — 22,632 — — — — — — — 23,080 45,712Other comprehensive loss — — — — — — — — 595 — 595Net (loss) income — (4,625) — 11,033 — 1,307 — 11,552 — (5,804) 13,463Partners’ capital, December 31, 2016 (Recast) — (40,713) 12,981 239,902 1,347 18,197 11,905 120,872 595 38,009 376,862Distributions to unitholders, distribution equivalent andincentive distribution rights — (2,630) — (31,533) — (3,065) — (27,084) — — (64,312)Issuance of units through Long-Term Incentive Plan — — 21 503 — — — — — — 503Issuance of common units, net — — 71 1,744 — — — — — — 1,744Non-cash Management Services Agreement expenses — 441 — 4,511 — — — — — — 4,952Other comprehensive loss — — — — — — — — (3,635) — (3,635)Excess consideration over Enviva Pellets Sampson, LLCnet assets — (744) — — — — — — — — (744)Contribution of Enviva Port of Wilmington, LLC Drop-Down — 29,513 — — — — — — — (32,270) (2,757)Enviva Port of Wilmington, LLC net assets — (73,335) — — — — — — — — (73,335)Excess consideration over Enviva Port of Wilmington,LLC net Assets — (40,683) — — — — — — — — (40,683)Enviva Pellets Wiggins, LLC dissolution — — — — — — — — — (2,599) (2,599)Net (loss) income — (418) — 8,900 — 918 — 8,113 — (3,140) 14,373Partners’ capital, December 31, 2017 $ — $(128,569) 13,073 $224,027 1,347 $16,050 11,905 $101,901 $(3,040) $ — $210,369 See accompanying notes to consolidated financial statements. 84 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESConsolidated Statements of Cash Flows Years ended December 31, 2017, 2016 and 2015(In thousands) 2016 2015 2017 (Recast) (Recast)Cash flows from operating activities: Net income $14,373 $13,463 $17,563Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 40,361 27,735 30,738Amortization of debt issuance costs, debt premium and original issue discounts 1,448 1,893 1,606Impairment of inventory — 890 —Impairment of assets held for sale — 9,991 —General and administrative expense incurred by sponsor — — 475General and administrative expense incurred by the First Hancock JV prior to Enviva Pellets Sampson, LLC Drop-Down — 2,343 2,364General and administrative expense incurred by the First Hancock JV prior to Enviva Port of Wilmington, LLC Drop-Down 1,343 1,744 1,396Allocation of income tax expense from Enviva Cottondale Acquisition I, LLC — — 2,663Early retirement of debt obligation — 4,438 4,699Loss on assets held for sale 827 — —Loss on disposal of assets 4,899 2,386 2,081Unit-based compensation 5,014 4,230 704De-designation of foreign currency forwards and options 1,593 — —Unrealized loss on foreign currency transactions (3) — —Change in fair value of interest rate swap derivatives — — 23Change in operating assets and liabilities: Accounts receivable, net (1,317) (39,218) (3,577)Related-party receivables 1,577 237 (176)Prepaid expenses and other assets 341 768 (115)Assets held for sale (479) — —Inventories 5,758 (8,411) (22)Other long-term assets — 6,698 (6,051)Derivatives (1,720) (1,284) —Accounts payable, accrued liabilities and other current liabilities (2,331) 19,379 6,718Related-party payables 15,733 3,625 4,121Accrued interest (1,330) 4,433 105Deferred revenue and deposits — (486) 425Other long-term liabilities 1,008 950 117Net cash provided by operating activities 87,095 55,804 65,857Cash flows from investing activities: Purchases of property, plant and equipment (28,744) (112,887) (100,216)Payment of acquisition related costs — — (3,573)Proceeds from the sale of property, plant and equipment 143 1,763 299Net cash used in investing activities (28,601) (111,124) (103,490)Cash flows from financing activities: Principal payments on debt and capital lease obligations (82,954) (204,216) (199,638)Principal payments on related-party debt — (3,391) —Cash paid related to debt issuance costs (540) (6,390) (6,287)Termination payment for interest rate swap derivatives — — (146)Cash restricted for debt service — — 11,640IPO proceeds, net — — 215,050Distributions to sponsor — (5,002) (297,185)Proceeds from common unit issuance under the At-the-Market Offering Program, net 1,938 9,300 —Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder (64,325) (51,376) (16,883)Proceeds from debt issuance 131,952 349,500 230,140Proceeds from contributions from sponsor — — 12,387Distribution to sponsor related to Enviva Pellets Sampson, LLC Drop-Down — (139,604) —Proceeds from contributions from the First Hancock JV prior to Enviva Pellets Sampson, LLC Drop-Down — 61,972 68,059Distributions to sponsor related to Enviva Port of Wilmington, LLC Drop-Down (55,929) — —Contributions from sponsor related to Enviva Pellets Sampson, LLC Drop-Down 1,652 — —Proceeds from contributions from the First Hancock JV prior to Enviva Port of Wilmington, LLC Drop-Down 9,965 43,574 24,000Payment of deferred offering costs (195) (709) (1,964)Net cash (used in) provided by financing activities (58,436) 53,658 39,173Net increase (decrease) in cash and cash equivalents 58 (1,662) 1,540Cash and cash equivalents, beginning of period 466 2,128 588Cash and cash equivalents, end of period $524 $466 $2,128 See accompanying notes to consolidated financial statements.85 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESConsolidated Statements of Cash Flows (Continued)Years ended December 31, 2017, 2016 and 2015(In thousands) 2016 2015 2017 (Recast) (Recast)Non-cash investing and financing activities: The Partnership acquired property, plant and equipment in non-cash transactions as follows: Property, plant and equipment acquired included in accounts payable and accrued liabilities $2,653 $14,255 $23,222Property, plant and equipment acquired under capital leases 1,956 1,753 39Property, plant and equipment transferred from inventories 226 926 319Contribution of Enviva Pellets Cottondale, LLC non-cash assets — — 122,529Transfer of Enviva Pellets Wiggins, LLC assets to assets held for sale — 13,035 —Application of deferred IPO costs to partners' capital — — 5,913Related-party long-term debt transferred to third-party long-term debt — 14,757 —Third-party long-term debt transferred to related-party long-term debt — 3,316 —Deferred consideration to sponsor included in long-term related-party payable 74,000 — —Retained matters from the First Hancock JV included in related-party receivables 585 — —Distributions included in liabilities 741 955 58Application of short-term deposit to fixed assets 258 — —Distribution due to sponsor — — 5,002Debt issuance costs included in accrued liabilities — 139 36Distribution of Enviva Pellets Cottondale, LLC assets to sponsor — — 319Non-cash adjustments to financed insurance and prepaid expenses — — 105Application of sales tax accrual to fixed assets — — 73Contribution to tax accounts of sponsor — — 35Depreciation capitalized to inventories (427) 344 211Due from the First Hancock JV for Enviva Pellets Sampson, LLC Drop-Down — 1,652 —Non-cash capital contributions from sponsor — — 339Non-cash capital contributions from the First Hancock JV prior to Enviva Pellets Sampson, LLC Drop-Down — 8,230 1,277Non-cash capital contributions from the First Hancock JV prior to Enviva Port of Wilmington, LLC Drop-Down — 393 906Supplemental information: Interest paid $31,513 $11,191 $9,935 See accompanying notes to consolidated financial statements. 86 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements(In thousands, except number of units, per unit amounts and unless otherwise noted)(1) Description of Business and Basis of PresentationEnviva Partners, LP (the “Partnership”) is a publicly traded Delaware limited partnership formed on November 12,2013 as a wholly owned subsidiary of Enviva Holdings, LP (together with its wholly owned subsidiaries Enviva MLPHoldco, LLC and Enviva Development Holdings, LLC, where applicable, the “sponsor”). Enviva Partners GP, LLC, a whollyowned subsidiary of Enviva Holdings, LP, is the General Partner (the “General Partner”) of the Partnership. Through itsinterests in Enviva, LP and its subsidiaries (other than Enviva Pellets Cottondale, LLC) (the “Predecessor”) and Enviva GP,LLC, the general partner of Enviva, LP, the Partnership supplies utility-grade wood pellets primarily to major powergenerators under long-term, take-or-pay off-take contracts. The Partnership procures wood fiber and processes it into utility-grade wood pellets and loads the finished wood pellets into railcars, trucks and barges that are transported to deep-watermarine terminals, where they are received, stored and ultimately loaded onto oceangoing vessels for transport to thePartnership’s principally European customers.The Partnership owns and operates six industrial-scale wood pellet production plants located in the Mid-Atlanticand Gulf Coast regions of the United States. Wood pellets are exported from the Partnership’s wholly owned deep-watermarine terminals in Chesapeake, Virginia (the “Chesapeake terminal”) and Wilmington, North Carolina (the “Wilmingtonterminal”), 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. The Partnership acquired the Wilmington terminal from a joint venture betweenthe sponsor and certain affiliates of John Hancock Life Insurance Company (U.S.A.) (the “First Hancock JV”) controlled byour sponsor on October 2, 2017 (see Note 4, Transactions Between Entities Under Common Control).Basis of PresentationOn January 5, 2015, the sponsor acquired Green Circle, which owned the wood pellet production plant located inCottondale, Florida (the “Cottondale plant”). The sponsor converted Green Circle into a Delaware limited liability companyand changed the name of the entity to “Enviva Pellets Cottondale, LLC.”In April 2015, the Partnership became the owner of the Predecessor, Enviva GP, LLC and Enviva CottondaleAcquisition II, LLC (“Acquisition II”), the former owner of Enviva Pellets Cottondale, LLC (“Cottondale”) through acontribution by the sponsor. The primary assets contributed to the Partnership by the sponsor included five industrial-scalewood pellet production plants, a wholly owned deep-water marine terminal and long-term contractual arrangements to sellthe wood pellets produced at the plants to third parties and associated shipping contracts.On May 4, 2015, the Partnership completed its IPO (see Note 2, Initial Public Offering). In connection with the IPO,under a contribution agreement between the sponsor, Enviva MLP Holdco, LLC, Enviva Cottondale Acquisition I, LLC, awholly owned subsidiary of the sponsor, the Predecessor and the Partnership, Acquisition II merged into the Partnership andthe Partnership contributed its interest in Cottondale to the Predecessor. Cottondale was contributed by the sponsor inexchange for subordinated units representing limited partner interests in the Partnership.On December 11, 2015, under the terms of a contribution agreement between the Partnership and the First HancockJV, the Partnership acquired from the First Hancock JV all of the issued and outstanding limited liability company interestsin Enviva Pellets Southampton, LLC (“Southampton”) for total consideration of $131.0 million. The acquisition (the“Southampton Drop-Down”) included a wood pellet production plant in Southampton County, Virginia (the “Southamptonplant”), a ten-year 500,000 metric tons per year (“MTPY”) take-or-pay off-take contract and a related third-party ten-yearshipping contract. The Partnership accounted for the Southampton Drop-Down as a combination of entities under commoncontrol at historical cost in a manner similar to a pooling of interests. Accordingly, the consolidated financial statements forthe periods prior to December 11, 2015 were retrospectively recast to reflect the87 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) acquisition as if it had occurred on April 9, 2015, the date Southampton was originally conveyed to the First Hancock JV.On December 14, 2016, under the terms of a contribution agreement between the Partnership and the First HancockJV (the “Sampson Contribution Agreement”), the First Hancock JV sold to the Partnership all of the issued and outstandinglimited liability company interests in Enviva Pellets Sampson, LLC (“Sampson”) for total consideration of $175.0 million.Sampson owns a wood pellet production plant in Sampson County, North Carolina (the “Sampson plant”). The acquisition(the “Sampson Drop-Down”) included the Sampson plant, an approximate ten-year, 420,000 MTPY take-or-pay off-takecontract with Ørsted Bioenergy & Thermal Power A/S (formerly “DONG Energy Thermal Power A/S”), an approximate 15-year, 95,000 MTPY off-take contract with the First Hancock JV and related third-party shipping contracts. The SampsonDrop-Down included the payment of $139.6 million in cash, net of a purchase price adjustment of $5.4 million, to the FirstHancock JV, the issuance of 1,098,415 unregistered common units at a value of $27.31 per unit, or $30.0 million of commonunits, to affiliates of John Hancock Life Insurance Company (U.S.A.), and the elimination of $1.2 million of net related-partyreceivables and payables included in the net assets on the date of acquisition. The Partnership accounted for the SampsonDrop-Down as a combination of entities under common control at historical cost in a manner similar to a pooling of interests.Accordingly, the consolidated financial statements for the periods prior to December 14, 2016 were retrospectively recast toreflect the Sampson Drop-Down as if it had occurred on May 15, 2013, the date Sampson was originally organized.On October 2, 2017, pursuant to the terms of a contribution agreement between the Partnership and the FirstHancock JV (the “Wilmington Contribution Agreement”), the Partnership acquired from the First Hancock JV all of theissued and outstanding limited liability company interests in Enviva Port of Wilmington, LLC (“Wilmington”), which ownsthe Wilmington terminal assets. The purchase price, which was $130.0 million, included an initial payment of $54.6 million,net of an approximate purchase price adjustment of $1.4 million. The initial payment was funded with borrowings fromrevolving credit commitments (see Note 12, Long-Term Debt and Capital Lease Obligations) and cash on hand. Theacquisition (the “Wilmington Drop-Down”) included the Wilmington terminal and a long-term terminal services agreementwith the Partnership’s sponsor to handle throughput volumes sourced by the sponsor from a wood pellet production plant inGreenwood, South Carolina (see Note 13, Related-Party Transactions). The terminal services agreement with the sponsorprovides for deficiency payments to Wilmington if quarterly minimum throughput requirements are not met. TheWilmington terminal will handle up to approximately 600,000 MTPY of throughput from the Sampson plant.In addition, the Wilmington Contribution Agreement contemplates that Wilmington will enter into a long-termterminal services agreement (the “Wilmington Hamlet TSA”) with the First Hancock JV and Enviva Pellets Hamlet, LLC(“Hamlet”) to receive, store and load wood pellets from the First Hancock JV’s proposed production plant in Hamlet, NorthCarolina (the “Hamlet plant”) when the First Hancock JV completes construction of the Hamlet plant. The WilmingtonHamlet TSA also provides for deficiency payments to Wilmington if minimum throughput requirements are not met. Pursuantto the Wilmington Contribution Agreement, following notice of the anticipated first delivery of wood pellets to theWilmington terminal from the Hamlet plant, Wilmington, Hamlet, and the First Hancock JV will enter into the WilmingtonHamlet TSA and the Partnership will make a final payment of $74.0 million in cash or common units to the First Hancock JV,subject to certain conditions, as deferred consideration for the Wilmington Drop-Down. At December 31, 2017, the $74.0million is included in related-party long-term payable on the consolidated balance sheets.Wilmington also entered into a throughput option agreement with the sponsor granting the sponsor, subject tocertain conditions, the option to obtain terminal services at the Wilmington terminal at marginal cost throughput rates forwood pellets produced by one of the sponsor’s potential wood pellet production plants.The Partnership accounted for the Wilmington Drop-Down as a combination of entities under common control athistorical cost in a manner similar to a pooling of interests. Accordingly, the consolidated financial statements for the periodsprior to October 2, 2017, have been retrospectively recast to reflect the acquisition of the First Hancock JV’s88 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) interests in Wilmington as if it had occurred on May 15, 2013, the date Wilmington was originally organized (see Note 4,Transactions Between Entities Under Common Control).Prior to December 28, 2017, the Partnership held a controlling interest in Enviva Pellet, LLC (“Wiggins”), whichowned a wood pellet plant in Stone County, Mississippi (the “Wiggins plant”). On December 27, 2017, the Partnership soldthe Wiggins plant to a third party buyer for a purchase price of $0.4 million and recorded a loss on the sale of $0.8 million,net, upon deconsolidation. On December 28, 2017 Wiggins was dissolved.As of December 31, 2017, the Partnership has 100% ownership of the following:·Enviva Partners Finance Corp. (“Enviva Finance Corp.”), a wholly owned subsidiary of the Partnership formedon October 3, 2016 for the purpose of being a co-issuer of some of the Partnership’s indebtedness·Enviva GP, LLCThe Partnership has 99.999% ownership of Enviva, LPEnviva GP, LLC has 0.001% ownership of Enviva, LPEnviva, LP has 100% ownership of the following:·Enviva Pellets Amory, LLC (“Enviva Pellets Amory”)·Enviva Pellets Ahoskie, LLC·Enviva Port of Chesapeake, LLC·Enviva Pellets Northampton, LLC·Enviva Pellets Southampton, LLC (“Southampton”)·Enviva Pellets Cottondale, LLC (“Cottondale”)·Enviva Materials, LLC·Enviva Energy Services, LLC·Enviva Pellets Perkinston, LLC·Enviva Pellets Sampson, LLC (“Sampson”)·Enviva Port of Wilmington, LLC (“Wilmington”)·Enviva Port of Panama City, LLC ·Enviva MLP International Holdings, LLC Enviva, LP has 99% ownership of the following:·Enviva Energy Services Coöperatief, U.A. 89 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Enviva MLP International Holdings has 100% ownership of the following:·Enviva Energy Services (Jersey), LimitedEnviva MLP International Holdings has 1% ownership of the following:·Enviva Energy Services Coöperatief, U.A. The accompanying consolidated financial statements (“financial statements”) include the accounts of thePredecessor and its subsidiaries and were prepared using the Predecessor’s historical basis. Prior to the IPO, certain of theassets and liabilities of the Predecessor were transferred to the Partnership within the sponsor’s consolidated group in atransaction under common control and, as such, the consolidated historical financial statements of the Predecessor arepresented as the Partnership’s historical financial statements as the Partnership believes they provide a representation ofmanagement’s ability to execute and manage its business plan. The financial statements include all revenues, costs, assetsand liabilities attributed to the Predecessor. The financial statements for periods prior to April 9, 2015, have beenretroactively recast to reflect the contribution of the sponsor’s interests in the Predecessor and Enviva GP, LLC as if thecontributions had occurred at the beginning of the periods presented and the contribution of the sponsor’s interests inAcquisition II as if the contribution occurred on January 5, 2015, the date Acquisition II was acquired by the sponsor. Thefinancial statements for the periods prior to December 14, 2016, have been retroactively recast to reflect the acquisition of theFirst Hancock JV’s interests in Sampson and Wilmington as if the contributions occurred on May 15, 2013, the date Sampsonand Wilmington were originally organized. (2) Initial Public Offering On May 4, 2015, the Partnership completed an initial public offering (“IPO”) of 11,500,000 common units, whichincluded a 1,500,000 common unit over-allotment option that was exercised in full by the underwriters at a price to thepublic of $20.00 per unit ($18.80 per common unit, net of underwriting discounts and commissions) and constitutingapproximately 48.3% of the Partnership’s outstanding limited partner interests. The net proceeds from the IPO ofapproximately $215.1 million after deducting the underwriting discount and structuring fee were used to (i) repayintercompany indebtedness related to the acquisition of Green Circle in the amount of approximately $83.0 million and (ii)distribute approximately $86.7 million to the sponsor related to its contribution of assets to the Partnership in connectionwith the IPO, with the Partnership retaining $45.4 million for general partnership purposes, including offering expenses.(3) Significant Accounting PoliciesPrinciples of ConsolidationThe accompanying consolidated financial statements have been prepared in accordance with accounting principlesgenerally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of thePartnership and its wholly owned and controlled subsidiaries. All intercompany accounts and transactions have beeneliminated.ReclassificationsCertain prior period amounts related to loss on disposal of assets have been reclassified to cost of goods sold fromgeneral and administrative expenses to conform to current period presentation. Certain prior period amounts related to thecontribution of Sampson included in general partner interest have been reclassified on the consolidated statements ofchanges in partners’ capital to non-controlling interests from the general partner interest to conform to current periodpresentation.90 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Common Control TransactionsAssets and businesses acquired from the Partnership’s sponsor and its controlled subsidiaries are accounted for ascommon control transactions whereby the net assets acquired are combined at their historical costs and the Partnership’sconsolidated financial statements are adjusted retrospectively to reflect the transaction as if it occurred on the earliest dateduring which the entities were under common control. If any recognized consideration transferred in such a transactionexceeds the carrying value of the net assets acquired, the excess is treated as a capital distribution to the General Partner. Ifthe carrying value of the net assets acquired exceeds any recognized consideration transferred including, if applicable, thefair value of any limited partner units issued, then that excess is treated as a capital contribution from the General Partner. Tothe extent that such transactions require prior periods to be recast, historical net equity amounts prior to the transaction dateare attributed to the General Partner and any noncontrolling partner interest at the historical amount.As the acquisition of Cottondale, the Southampton Drop-Down, the Sampson Drop-Down and the Wilmington Drop-Down represented transfers of entities under common control, the consolidated financial statements and related informationpresented have been recast to include the historical results of Cottondale effective January 5, 2015, the date the Partnership’ssponsor acquired Acquisition II, Southampton effective April 9, 2015, the date Southampton was originally conveyed to theFirst Hancock JV and Sampson and Wilmington effective May 15, 2013, the date Sampson and Wilmington were originallyorganized.Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make judgments,estimates and assumptions that affect the amounts reported in the Partnership’s consolidated financial statements andaccompanying notes. Actual results could differ materially from those estimates.Segment and Geographic InformationOperating segments are defined as components of an enterprise about which discrete financial information isavailable and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and inassessing performance. The Partnership views its operations and manages its business as one operating segment. All long-lived assets of the Partnership are located in the United States.Other Comprehensive Income (Loss)Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss).Other comprehensive income (loss) refers to revenue, expenses, and gains and losses that under GAAP are included incomprehensive income (loss) but excluded from net income (loss). The Partnership’s other comprehensive income consists ofunrealized gains and losses related to derivative instruments accounted for as cash flow hedges.91 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Cash and Cash EquivalentsCash and cash equivalents consist of short-term, highly liquid investments readily convertible into cash with anoriginal maturity of three months or less.Accounts ReceivableAccounts receivable are recorded at the invoiced amount and do not bear interest. In establishing an allowance fordoubtful accounts, management considers historical losses adjusted to take into account current market conditions andcustomers’ financial condition, the amount of receivables in dispute, the current receivables aging and current paymentpatterns. The Partnership does not have any off-balance-sheet credit exposure related to its customers.InventoriesInventories consist of raw materials, work-in-progress, consumable tooling and finished goods. Fixed productionoverhead, including related depreciation expense, is allocated to inventory based on the normal production capacity of thefacilities. To the extent the Partnership does not achieve normal production levels, the Partnership charges such underabsorption of fixed overhead to cost of sales in the period incurred.Consumable tooling consists of spare parts and tooling to be consumed in the production process. Spare parts areexpected to be used within a year and are expensed as used. Tooling items are amortized to expense over an estimated servicelife generally less than one year.Inventories are stated at the lower of cost or market using the first-in, first-out method (“FIFO”) for all inventories.Revenue RecognitionThe Partnership primarily earns revenue by supplying wood pellets to its customers under off-take contracts, themajority of the commitments under which are long-term in nature. The Partnership refers to the structure of its contracts as“take-or-pay” because they include a firm obligation of the customer to take a fixed quantity of product at a stated price andprovisions that ensure the Partnership will be compensated in the case of a customer’s failure to accept all or a part of thecontracted volumes or for termination by a customer. Each contract defines the annual volume of wood pellets that acustomer is required to purchase and the Partnership is required to sell, the fixed price per metric ton for product satisfying abase net calorific value and other technical specifications. These prices are fixed for the entire term, subject to annualinflation-based adjustments and price escalators, as well as, in some instances, price adjustments for product specificationsand changes in underlying costs, which have historically been immaterial. In addition to sales of the Partnership’s productunder these long-term, take-or-pay contracts, the Partnership routinely sells wood pellets under shorter-term contracts, whichrange in volume and tenor and, in some cases, may include only one specific shipment. Because each of the Partnership’scontracts is a bilaterally negotiated agreement, the Partnership’s revenue over the duration of these contracts does notgenerally follow spot market pricing trends. The Partnership’s revenue from the sale of wood pellets is recognized as“Product Sales” when title and risk of loss has passed to the customer, the sales price to the customer is fixed anddeterminable, and collectability is reasonably assured.Depending on the specific off‑take contract, shipping terms are either CIF, CFR or FOB. Under a CIF contract, weprocure and pay for shipping costs, which include insurance and all other charges, up to the port of destination for thecustomer. Under a CFR contract, we procure and pay for shipping costs, which include insurance (excluding marine cargoinsurance) and all other charges, up to the port of destination for the customer. Shipping costs under CIF and CFR contractsare included in the price to the customer and, as such, are included in revenue and cost of goods sold. Under FOB contracts,the customer is directly responsible for shipping costs. Our customer shipping terms, as well as the92 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) timing and size of shipments during the year, can result in material fluctuations in our revenue recognized between periodsbut generally have little impact on gross margin.In some cases, the Partnership may purchase shipments of product from third-party suppliers and resell them in back-to-back transactions that immediately transfer title and risk of loss to the ultimate purchaser. Thus, the revenue from thesetransactions is recorded net of costs paid to the third-party supplier. The Partnership records this revenue as “Other revenue.”In instances when a customer requests the cancellation, deferral or acceleration of a shipment, the customer may paya fee, including reimbursement of any incremental costs incurred by the Partnership, which is included in “Other revenue.”Other revenue also includes third- and related-party terminal services fees.Cost of Goods SoldCost of goods sold includes the costs to produce and deliver wood pellets to customers. Raw material, productionand distribution costs associated with delivering wood pellets to our owned and leased marine terminals and third‑ andrelated-party wood pellet purchase costs are capitalized as a component of inventory. Fixed production overhead, includingthe related depreciation expense, is allocated to inventory based on the normal capacity of the production plants. These costsare reflected in cost of goods sold when inventory is sold. Distribution costs associated with shipping wood pellets tocustomers and amortization of favorable acquired customer contracts are expensed as incurred. Inventory is recorded usingFIFO, which requires the use of judgment and estimates. Given the nature of the inventory, the calculation of cost of goodssold is based on estimates used in the valuation of the FIFO inventory and in determining the specific composition ofinventory that is sold to each customer.Derivative InstrumentsThe Partnership uses derivative instruments to partially offset its exposure to foreign currency exchange and interestrate risk. The Partnership enters into foreign currency forward and option contracts, a portion of which have been designatedas cash flow hedges, to offset foreign currency exchange risk on a portion of forecasted revenue and enters into interest rateswaps to offset the variable interest rate risk associated with borrowings. The Partnership does not hold or issue derivativefinancial instruments for trading or speculative purposes.Derivative instruments are classified as either assets or liabilities on a gross basis and carried at fair value andincluded in prepaid expenses and other current assets, other long-term assets, accrued and other current liabilities, and . otherlong-term liabilities on the consolidated balance sheets. Changes in fair value are either recognized as unrealized gains andlosses in accumulated other comprehensive income in partners’ capital or net income depending on the nature of theunderlying exposure, whether the derivative is formally designated as a hedge, and, if designated, the extent to which thehedge is effective. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes toexpected future cash flows on hedged transactions.The effective portion of foreign currency forward and option contracts designated as cash flow hedges is reported asa component of accumulated other comprehensive income in partners’ capital and reclassified into revenue in the sameperiod or periods during which the hedged revenue affects earnings. The effective portion of interest rate swaps designated ascash flow hedges is reported as a component of accumulated other comprehensive income in partners’ capital and reclassifiedinto interest expense in the same period or periods during which the hedged interest expense affects earnings. The ineffectiveportion of cash flow hedges, if any, is recognized in earnings in the current period. The Partnership links all derivativeinstruments that are designated as cash flow hedges to specific assets and liabilities on the consolidated balance sheets or tospecific forecasted transactions.93 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) To qualify for hedge accounting, the item to be hedged must cause an exposure risk and the Partnership must havean expectation that the related hedging instrument will be effective at reducing or mitigating that exposure. In accordancewith the hedging requirements, the Partnership documents all hedging relationships at inception and includes a descriptionof the risk management objective and strategy for undertaking the hedge, identification of the hedging instrument, thehedged item, the nature of the risk being hedged, the method for assessing effectiveness of the hedging instrument inoffsetting the hedged risk and the method of measuring any ineffectiveness. When an event or transaction occurs or thederivative contract expires or the forecasted transaction is no longer probable of occurring, hedge accounting isdiscontinued. The Partnership also formally assesses, both at the hedge’s inception and on an ongoing basis, whether thederivative instruments are highly effective in offsetting changes in cash flows of hedged items. If it is determined that aderivative instrument has ceased to be a highly effective hedge, hedge accounting is discontinued prospectively.Hedge effectiveness for foreign exchange forward contracts designated as cash flow hedges is assessed by comparingthe change in the fair value of the hedge contract with the change in the fair value of the forecasted cash flows of the hedgeditem. For foreign exchange option contracts, hedge effectiveness is assessed based on the hedging instrument’s entire changein fair value. Hedge effectiveness for interest rate swaps is assessed by comparing the change in fair value of the swap withthe change in the fair value of the hedged item due to changes in the benchmark interest rate.Derivative instruments that do not qualify, or no longer qualify, as hedges are adjusted to fair value throughearnings in the current period.Foreign Currency HedgesThe Partnership may hedge a portion of its foreign currency exposure associated with revenue under off-takecontracts not denominated in U.S. Dollars. The Partnership has designated a portion of its foreign currency forward contractsand foreign currency purchased options as cash flow hedges. These derivatives are used to hedge certain revenue transactionsforecasted generally within the next 60-month period.Interest Rate HedgesThe Partnership utilizes an interest rate swap to hedge its cash flow exposure to fluctuations in variable-basedinterest rates under borrowings. The Partnership entered into a pay-fixed, receive-variable interest rate swap in September2016 to hedge the interest rate risk associated with Tranche A-1 and Tranche A-3 of the Senior Secured Credit Facilities. ThePartnership discontinued hedge accounting as of December 14, 2016 following the repayment of Tranche A-1 and A-3 of theSenior Secured Credit Facilities (see Note 12, Long-Term Debt and Capital Lease Obligations). Interest expense for the yearended December 31, 2017 included the reclassification of an insignificant amount representing the effective portion reportedas a component of accumulated other comprehensive income.The Predecessor previously used derivative financial instruments to manage its exposure to fluctuations in interestrates on long-term debt as required per the terms of the Prior Senior Secured Credit Facilities (see Note 12, Long-Term Debtand Capital Lease Obligations). The Predecessor recognized the interest rate swaps on the consolidated balance sheet at fairvalue. The Predecessor’s interest rate swap agreements were not designated as hedges; therefore, the gain or loss wasrecognized in the consolidated statement of income in interest expense. In connection with the repayment of the Prior SeniorSecured Credit Facilities in April 2015 (see Note 12, Long-Term Debt and Capital Lease Obligations), the Predecessorterminated the interest rate swaps and paid a termination fee of $0.1 million.Property, Plant and EquipmentProperty, plant and equipment are recorded at cost, which includes the fair values of assets acquired. Equipmentunder capital leases is stated at the present value of minimum lease payments. Useful lives of assets are based on94 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) historical experience and are adjusted when changes in the expected physical life of the asset, its planned use, technologicaladvances, or other factors show that a different life would be more appropriate. Changes in useful lives are recognizedprospectively.Depreciation is calculated using the straight-line method based on the estimated useful lives of the related assets.Plant and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term orestimated useful life of the asset.Construction in progress primarily represents expenditures for the development and expansion of facilities.Capitalized interest cost and all direct costs, which include equipment and engineering costs related to the development andexpansion of facilities, are capitalized as construction in progress. Depreciation is not recognized for amounts in constructionin progress.Normal repairs and maintenance costs are expensed as incurred. Amounts incurred that extend an asset’s useful life,increase its productivity or add production capacity are capitalized. Direct costs, such as outside labor, materials, internalpayroll and benefit costs, incurred during the construction of a new plant are capitalized; indirect costs are not capitalized.The principal useful lives are as follows:Asset Estimated useful lifeLand improvements 15 to 17 yearsBuildings 5 to 40 yearsMachinery and equipment 2 to 25 yearsVehicles 5 to 6 yearsFurniture and office equipment 2 to 10 yearsLeasehold improvements Shorter of estimated useful life or lease term, generally 10 years Costs and accumulated depreciation applicable to assets retired or sold are removed from the accounts, and anyresulting gain or loss is included in the consolidated statement of operations.Debt Issuance Costs and Original Issue DiscountDebt issuance costs represent legal fees, underwriter fees and other direct expenses associated with securing thePartnership’s borrowings and are capitalized on the consolidated balance sheets as a direct deduction from the carryingamount of the related long-term debt. Original issue discounts are recorded on the consolidated balance sheets within thecarrying amount of long-term debt. Debt issuance costs and original issue discount are amortized over the term of the relateddebt using straight line amortization, which approximates the effective interest rate method. If a debt instrument is retiredbefore its scheduled maturity date, any unamortized debt issuance costs and original issue discount associated with that debtinstrument are expensed in the same period. Debt issuance costs and original issue discount at December 31, 2017 and 2016,were $7.1 million and $7.8 million, respectively.Gains or losses on debt extinguishment include any associated unamortized debt issuance costs and original issuediscount.GoodwillGoodwill represents the purchase price paid for acquired businesses in excess of the identifiable acquired assets andassumed liabilities. Goodwill is not amortized, but is tested for impairment annually and whenever an event occurs orcircumstances change such that it is more likely than not that the fair value of the reporting unit is less than its carryingamounts. At December 31, 2017 and 2016, the Partnership identified one reporting unit that corresponded to the95 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Partnership’s one segment. The Partnership has selected the fourth fiscal quarter to perform its annual goodwill impairmenttest.The Partnership first performs a qualitative assessment to determine whether it is necessary to perform quantitativetesting. If this initial qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit ismore than its carrying value, goodwill is not considered impaired and the Partnership is not required to perform the two-stepimpairment test. Qualitative factors considered in this assessment include (i) macroeconomic conditions, (ii) past, current andprojected future financial performance, (iii) industry and market considerations, (iv) changes in the costs of raw materials,fuel and labor and (v) entity-specific factors such as changes in management or customer base.If the results of the qualitative assessment indicate that it is more likely than not that goodwill is impaired, thePartnership will perform a two-step impairment test. Under the first step, the fair value of the reporting unit is compared withits carrying value (including goodwill). If the fair value of the reporting unit exceeds its carrying value, step two does notneed to be performed.If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists forthe reporting unit and the entity must perform step two of the impairment test (measurement). Under Step 2, an impairmentloss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of thatgoodwill.For the years ended December 31, 2017 and 2016, the Partnership applied the qualitative test and determined that itwas more likely than not that the estimated fair value of the reporting unit substantially exceeded the related carrying value,and, accordingly, was not required to apply the two-step impairment test. The Partnership did not record any goodwillimpairment for the years ended December 31, 2017 and 2016 (see Note 10, Goodwill and Other Intangible Assets).In making this qualitative analysis for the years ended December 31, 2017, and 2016, the Partnership evaluated thefollowing economic factors:·The Partnership’s consolidated financial results reflect continued improved financial performance in 2017compared to 2016 as reflected by increases in gross margin as well as the generation of positive net income in2017 and 2016.·The Partnership continued its expansion with the Wilmington Drop-Down.·In 2017, the Partnership entered into agreements for incremental volumes with new and existing customers.·In October 2017, the Partnership issued $55.0 million in aggregate principal amount of 8.5% senior unsecurednotes due 2021 at a premium of 106.25% to par value.·The Partnership’s market capitalization exceeds the carrying value of its net assets as of December 31, 2017.Intangible AssetsIn April 2015, the sponsor contributed net assets to the Partnership associated with the acquisition of Green Circle inJanuary 2015, which included intangible assets related to favorable customer contracts (see Note 1, Description of Businessand Basis of Presentation). The Partnership also recorded payments made to acquire a six-year wood pellet off-take contractwith a European utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streamsgenerated from the customer contracts and are closely related to the revenue from the customer96 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) contracts. These costs are recorded as an asset and charged to expense as the revenue is recognized (see Note 10, Goodwilland Other Intangible Assets). All other costs, such as general and administrative expenses and costs associated with thenegotiation of a contract that is not consummated, are charged to expense as incurred.Unit-Based CompensationEmployees, consultants and directors of the General Partner and any of its affiliates are eligible to receive awardsunder the Enviva Partners, LP Long-Term Incentive Plan. For accounting purposes, units granted to employees of thePartnership’s affiliates are treated as if they are distributed by the Partnership. Phantom units issued in tandem withcorresponding distribution equivalent rights (“DERs”) are granted to employees of Enviva Management who provideservices to the Partnership and to certain non-employee directors of the General Partner. These awards vest subject to thesatisfaction of service requirements or the achievement of certain performance goals, following which common units in thePartnership will be delivered to the holder of the phantom units. Affiliate entities recognize compensation expense for thephantom units awarded to their employees and a portion of that expense is allocated to the Partnership (see Note 13, Related-Party Transactions-Management Services Agreement and Note 16, Equity-Based Awards). The Partnership’s outstandingunit-based awards do not have a cash option and are classified as equity on the Partnership’s consolidated balance sheets.The Partnership also recognizes compensation expense for units awarded to non-employee directors.Impairment of Long-Lived AssetsLong-lived assets, such as property, plant and equipment and amortizable intangible assets, are tested forimpairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not berecoverable. If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Partnershipfirst compares undiscounted cash flows expected to be generated by that asset or asset group to such asset or asset group’scarrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flowbasis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determinedthrough various valuation techniques including discounted cash flow models, quoted market values and third-partyindependent appraisals, as considered necessary.Commitments and ContingenciesLiabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sourcesare recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costsincurred in connection with loss contingencies are expensed as incurred.Fair Value MeasurementsThe Partnership applies authoritative accounting guidance for fair value measurements of financial and nonfinancialassets and liabilities. The Partnership uses valuation techniques that maximize the use of observable inputs and minimize theuse of unobservable inputs to the extent possible. The Partnership determines fair value based on assumptions that marketparticipants would use in pricing an asset or liability in the principal or most advantageous market. When considering marketparticipant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable andunobservable inputs, which are categorized in one of the following levels:·Level 1 Inputs: Unadjusted, quoted prices in active markets for identical assets or liabilities accessible to thereporting entity at the measurement date.·Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability,either directly or indirectly, for substantially the full term of the asset or liability.97 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) ·Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent thatobservable inputs are not available, thereby allowing for situations in which there is little, if any, marketactivity for the asset or liability at the measurement date.Recent and Pending Accounting PronouncementsIn August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2017-12, Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815)-TargetedImprovements to Accounting for Hedging Activities. ASU 2017-12 expands and refines hedge accounting for both financialand non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedgeitems in the financial statements, and includes certain targeted improvements to ease the application of current guidancerelated to the assessment of hedge effectiveness. ASU 2017-12 requires a modified retrospective transition method whichrequires the recognition of the cumulative effect of the change on the opening balance of each affected component of equityin the statement of financial position as of the date of adoption. The new guidance is effective for fiscal years, and interimperiods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Partnership is in theprocess of evaluating the impact of the adoption of ASU No. 2017-12 on its consolidated financial statements.In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other. ASU 2017-04 simplifies theaccounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test. In computing the impliedfair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testingdate of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be requiredin determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the newstandard, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reportingunit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carryingamount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwillallocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit todetermine if the quantitative impairment test is necessary. The new guidance should be adopted for annual or any interimgoodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim orannual goodwill impairment tests performed on testing dates after January 1, 2017. This standard will be implementedprospectively in 2018 for all future goodwill impairment tests and will simplify such evaluations.In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definitionof a Business, in an effort to clarify the definition of a business with the objective of adding guidance to assist entities withevaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Theamendments in this standard provide a screen to determine when an integrated set of assets and activities is not a business.The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated ina single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not a business.The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscalyears. Early adoption is allowed for transactions for which the acquisition date occurs before the issuance date or effectivedate of the amendments, only when the transaction has not been reported in financial statements that have been issued ormade available for issuance and for transactions in which a subsidiary is deconsolidated or a group of assets is derecognizedthat occur before the issuance date or effective date of the amendments, only when the transaction has not been reported infinancial statements that have been issued or made available for issuance. The ASU is effective for the Partnership’s fiscalyear 2018, including interim periods. The adoption of this standard may have an impact on the accounting for futureacquisitions.In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) — Restricted Cash: AConsensus of the FASB Emerging Issues Task Force, which requires that a statements of cash flows explain the change duringthe period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cashequivalents. As a result, entities will no longer present transfers between cash and cash equivalents and98 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) restricted cash and restricted cash equivalents in the statements of cash flows. The guidance addresses the presentation ofchanges in restricted cash and restricted cash equivalents in the statements of cash flows. When cash, cash equivalents,restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the newguidance requires a reconciliation of the totals in the statements of cash flows to the related captions in the balance sheet.This reconciliation can be presented either on the face of the statements of cash flows or in the notes to the financialstatements. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances. Thenew guidance is effective for public business entities for fiscal years and interim periods within those years beginning afterDecember 15, 2017. Early adoption in an interim period is permitted, but any adjustments must be reflected as of thebeginning of the fiscal year that includes that interim period. Entities will be required to apply the guidance retrospectivelywhen adopted. The ASU is effective for the Partnership’s fiscal year 2018, including interim periods. As a result of theadoption of this standard, restricted cash and restricted cash equivalents will be included with cash and cash equivalents onthe consolidated statements of cash flows. Transfers between cash, cash equivalents, restricted cash and restricted cashequivalents will not be presented separately in the statements of cash flows. If cash and restricted cash are presented in morethan one line item on the balance sheet, a reconciliation of these amounts to the total shown on the statements of cash flowmust be presented in either a narrative or tabular form on the face of the statements of cash flows or in the notes to thefinancial statements. The Partnership does not expect the adoption of the new standard to have a material effect on how cashreceipts and cash payments are presented and classified in the consolidated statements of cash flows.In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) — Classification ofCertain Cash Receipts and Cash Payments, which will make eight targeted changes to how cash receipts and cash paymentsare presented and classified in the statements of cash flows with the objective of reducing the existing diversity in practice.The guidance addresses the classification of cash flows related to (1) debt prepayment or extinguishment costs, (2) settlementof zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effectiveinterest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds fromthe settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-ownedlife insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitizationtransactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cashpayments have aspects of more than one class of cash flows. An entity will first apply any relevant guidance. If there is noguidance that addresses those cash receipts and cash payments, an entity will determine each separately identifiable source oruse and classify the receipt or payment based on the nature of the cash flow. If a receipt or payment has aspects of more thanone class of cash flows and cannot be separated, classification will depend on the predominant source of use. The newguidance is effective for public business entities for fiscal years and interim periods within those years beginning afterDecember 15, 2017. The new guidance will require adoption on a retroactive basis unless it is impracticable to apply, inwhich case it would be required to apply the amendments prospectively as of the earliest date practicable. The ASU iseffective for the Partnership’s fiscal year 2018, including interim periods. The Partnership does not expect the adoption of thenew standard to have a material effect on how cash receipts and cash payments are presented and classified in theconsolidated statements of cash flows.In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new pronouncement, an entity is requiredto recognize assets and liabilities arising from a lease for all leases with a maximum possible term of more than 12 months. Alessee is required to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing itsright to use the leased asset (the underlying asset) for the lease term. For most leases of assets other than property (forexample, equipment, aircraft, cars, trucks), a lessee would recognize a right-of-use asset and a lease liability, initiallymeasured at the present value of lease payments and recognize the unwinding of the discount on the lease liability as interestseparately from the amortization of the right-of-use asset. For most leases of property (that is, land and/or a building or part ofa building), a lessee would recognize a right-of-use asset and a lease liability, initially measured at the present value of leasepayments and recognize a single lease cost, combining the unwinding of the discount on the lease liability with theamortization of the right-of-use asset, on a straight-line basis. The new guidance is effective for public entities for fiscal yearand interim periods within those fiscal years beginning after December 15, 2018. Upon adoption, a lessee and a lessor wouldrecognize and measure leases at the beginning of the earliest period99 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) presented using a modified retrospective approach. Early adoption is permitted. The Partnership is in the process ofevaluating the impact of adoption on its consolidated financial statements.In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 providesnew guidance on the recognition of revenue and states that an entity should recognize revenue when control of the goods orservices transfers to the customer in an amount that reflects the consideration to which the entity expects to be entitled inexchange for those goods or services. ASU 2014-09 also requires significantly expanded disclosure regarding qualitative andquantitative information about the nature, timing and uncertainty of revenue and cash flows arising from contracts withcustomers. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers—Principal versusAgent Considerations. ASU No. 2016-08 clarifies the implementation guidance on principal versus agent considerations. InMay 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers, which provides narrow scopeimprovements and practical expedients related to ASU No. 2014-09. ASU No. 2014-09 and subsequent amendments havebeen codified as Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. ASC 606 is effective for annual reporting periods beginning after December 15, 2017, including interim periodswithin that reporting period. The Partnership will adopt ASC 606 effective January 1, 2018. The Partnership currentlyexpects to utilize the modified retrospective method of adoption, which will result in the presentation of the cumulativeeffect of initially applying ASC 606 at the date of initial application. The Partnership has established a cross-functional teamto lead the assessment and implementation of ASC 606 and has finalized its implementation plans. In connection with theimplementation plan, the Partnership has completed its evaluation of its off-take contracts to identify material performanceobligations. The Partnership has concluded that the delivery of wood pellets to the customer is the material performanceobligation under its off-take contracts. The Partnership also concluded it will aggregate wood pellets into metric tons andaccount for each metric ton as a single performance obligation. The Partnership has determined that revenue related to its off-take contracts will be recognized at the point in time at which control of the wood pellets passes to the customer, as the woodpellets are loaded onto shipping vessels, which is consistent with the timing of revenue recognition under the Partnership’scurrent accounting policy. Additionally, the Partnership has concluded that revenue from certain transactions currentlypresented on a net basis in other revenue will be recognized as principal sales on a gross basis under ASC 606. ThePartnership based its conclusion on the fact that in certain instances it controls wood pellets supplied by third parties beforecontrol is transferred to customers, even in cases of “flash title”. ASC 606 requires revenue to be recognized on a gross basiswhen control of goods or services is established before transfer to customers.Certain costs incurred at the discharge port and recoverable from customers were reported in revenue under legacyrevenue guidance. Under ASC 606, these costs are not considered a part of the transaction price, and therefore will beexcluded from revenue.ASC 606 permits an entity to account for shipping and handling activities occurring after control has passed to thecustomer as a fulfillment activity rather than as a revenue element. The Partnership has elected to account for shipping andhandling activities as a fulfillment activity, consistent with its current policy. The Partnership does not expect to have amaterial cumulative effect adjustment upon adoption of ASC 606.(4) Transactions Between Entities Under Common ControlWilmington Drop-DownOn October 2, 2017, the Partnership acquired from the First Hancock JV all of the issued and outstanding limitedliability company interests in Wilmington for total consideration of $130.0 million (see Note 1, Description of Business andBasis of Presentation). The acquisition included an initial payment of $54.6 million in cash, net of a purchase priceadjustment of $1.4 million, and deferred consideration of $74.0 million in cash or common units, to the First Hancock JV,and the elimination of $1.0 million of related-party receivables and payables, net, included in the net assets on the date ofacquisition.100 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Recast of Historical Financial StatementsThe Partnership accounted for the Wilmington Drop-Down as a combination of entities under common control athistorical cost in a manner similar to a pooling of interests. Accordingly, the consolidated financial statements for the periodsprior to October 2, 2017 were retrospectively recast to reflect the acquisition as if it had occurred on May 15, 2013, the dateWilmington was originally organized.The following table outlines the changes in consolidated net assets resulting from the acquisition of Wilmington onOctober 2, 2017.Assets: Cash $ —Related-party receivables 2,914Inventories 96Prepaid expenses and other current assets 94Property, plant and equipment, net 75,474Total assets 78,578 Liabilities: Accounts payable 195Related-party payables 319Accrued and other current liabilities 2,864Long-term debt and capital lease obligations 243Long-term liabilities 1,622Total liabilities 5,243Net assets contributed to Partnership $73,335 101 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) The following table presents the changes to previously reported amounts in the audited consolidated balance sheetas of December 31, 2016 included in the Partnership’s annual report on Form 10-K for the year ended December 31. 2016: As of December 31, 2016 As Enviva Port Of Total Reported Wilmington, LLC (Recast)Cash and cash equivalents $466 $ — $466Accounts receivable, net 77,868 — 77,868Related-party receivables 7,634 422 8,056Inventories 29,764 172 29,936Prepaid expenses and other current assets 4,983 40 5,023Total current assets 120,715 634 121,349Property, plant and equipment, net of accumulated depreciation 516,418 74,498 590,916Goodwill 85,615 — 85,615Other assets 3,420 76 3,496Total assets $726,168 $75,208 $801,376 Accounts payable $9,869 $124 $9,993Related-party payables 11,118 354 11,472Accrued and other current liabilities 47,337 6,155 53,492Total long-term debt and capital lease obligations 346,686 229 346,915Other liabilities 1,641 1,001 2,642Total liabilities 416,651 7,863 424,514Total partners’ capital 309,517 67,345 376,862Total liabilities and partners’ capital $726,168 $75,208 $801,376 The following table presents the changes to previously reported amounts in the audited consolidated statements ofincome for the years ended December 31, 2016 and 2015 included in the Partnership’s annual report on Form 10-K for theyear ended December 31, 2016: Year Ended December 31, 2016 As Enviva Port Of Total Reported Wilmington, LLC (Recast)Net revenue $464,276 $ — $464,276Total cost of goods sold 387,289 215 387,504Gross margin 76,987 (215) 76,772Net income (loss) 17,723 (4,260) 13,463Less net loss attributable to noncontrolling partners’ interests 3,654 2,150 5,804Net loss attributable to general partner (3,231) (2,110) (5,341)Net income attributable to Enviva Partners, LP limited partners’ interestin net income 24,608 — 24,608 102 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Year Ended December 31, 2015 As Enviva Port Of Total Reported Wilmington, LLC (Recast)Net revenue $457,374 $ — $457,374Total cost of goods sold 397,834 — 397,834Gross margin 59,540 — 59,540Net income (loss) 19,460 (1,897) 17,563Less net income attributable to noncontrolling partners’ interests 1,899 960 2,859Net loss attributable to Predecessor (2,132) — (2,132)Net income (loss) attributable to general partner 4,449 (937) 3,512Net income attributable to Enviva Partners, LP limited partners’ interest in netincome 19,042 — 19,042 The following table presents the changes to previously reported amounts in the audited consolidated statements ofcash flows for the years ended December 31, 2016 and 2015 included in the Partnership’s annual report on Form 10-K for theyear ended December 31, 2016: Year Ended December 31, 2016 As Enviva Port Of Total Reported Wilmington,LLC (Recast)Net cash provided by (used in) operating activities $57,393 $(1,589) $55,804Net cash used in investing activities (69,147) (41,977) (111,124)Net cash provided by financing activities 10,092 43,566 53,658Net decrease in cash and cash equivalents $(1,662) $ — $(1,662) Year Ended December 31, 2015 As Enviva Port Of Total Reported Wilmington,LLC (Recast)Net cash provided by (used in) operating activities $66,413 $(556) $65,857Net cash used in investing activities (80,046) (23,444) (103,490)Net cash provided by financing activities 15,173 24,000 39,173Net increase in cash and cash equivalents $1,540 $ — $1,540 (5) Significant Risks and Uncertainties, Including Business and Credit ConcentrationsThe Partnership’s business is significantly impacted by GHG emission and renewable energy legislation andregulations in the European Union as well as its member states. If the European Union or its member states significantlymodify such legislation or regulations, then the Partnership’s ability to enter into new contracts as the current contractsexpire may be materially affected.The Partnership’s primary industrial customers are located in the United Kingdom, Denmark and Belgium. Threecustomers accounted for 93% of the Partnership’s product sales in 2017, two customers accounted for 90% of thePartnership’s product sales in 2016 and three customers accounted for 93% of the Partnership’s product sales in 2015.103 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) The following table shows product sales to third-party customers that accounted for 10% or a greater share of consolidatedproduct sales for each of the years ended December 31: 2016 2015 2017 (Recast) (Recast) Customer A 66% 75% 56% Customer B 12% 15% 19% Customer C —% —% 18% Customer E 15% —% —% The Partnership’s cash and cash equivalents are placed in or with various financial institutions. The Partnership hasnot experienced any losses on such accounts.(6) Property, Plant and EquipmentProperty, plant and equipment consisted of the following at December 31: 2016 2017 (Recast)Land $13,492 $13,492Land improvements 42,962 42,322Buildings 196,153 186,479Machinery and equipment 413,349 400,867Vehicles 635 522Furniture and office equipment 5,970 5,604Leasehold improvements 987 742 673,548 650,028Less accumulated depreciation (117,067) (80,781) 556,481 569,247Construction in progress 5,849 21,669Total property, plant and equipment, net $562,330 $590,916Total depreciation expense was $39.1 million, $25.7 million and $24.7 million for the years ended December 31,2017, 2016 and 2015, respectively. At December 31, 2017, the Partnership had assets under capital leases with a cost andrelated accumulated depreciation of $4.7 million and $1.2 million, respectively. At December 31, 2016, the Partnership hadassets under capital leases with a cost and related accumulated depreciation of $2.4 million and $0.7 million, respectively.(7) InventoriesInventories consisted of the following at December 31: 2016 2017 (Recast)Raw materials and work-in-process $4,516 $7,689Consumable tooling 14,447 12,150Finished goods 4,573 10,097Total inventories $23,536 $29,936 104 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (8) Derivative InstrumentsThe Partnership uses derivative instruments to partially offset its business exposure to foreign currency exchangeand interest rate risk. The Partnership may enter into foreign currency forward and option contracts to offset some of theforeign currency exchange risk on expected future cash flows and interest rate swaps to offset some of the interest rate risk onexpected future cash flows on certain borrowings. The Partnership’s derivative instruments expose it to credit risk to theextent that hedge counterparties may be unable to meet the terms of the applicable derivative instrument. The Partnershipseeks to mitigate such risks by limiting its counterparties to major financial institutions. In addition, the Partnership monitorsthe potential risk of loss with any one counterparty resulting from credit risk. Management does not expect material losses asa result of defaults by counterparties. The Partnership uses derivative instruments to manage cash flow and does not enterinto derivative instruments for speculative or trading purposes.Cash Flow HedgesForeign Currency Exchange RiskThe Partnership is primarily exposed to fluctuations in foreign currency exchange rates related to off-take contractsthat require future deliveries of wood pellets to be settled in British Pound Sterling (“GBP”). Deliveries under one of thesecontracts began in late 2017. The Partnership has and may continue to enter into foreign currency forward contracts,purchased option contracts or other instruments to partially manage this risk and has designated and may continue todesignate these instruments as cash flow hedges. During December 2017, the Partnership determined that certain transactionswere no longer probable of occurring within the forecasted time period. The Partnership discontinued hedge accounting andrecognized gains and losses accumulated in other comprehensive income related to these hedging relationships in otherexpense on the consolidated statements of income.For the qualifying cash flow hedges, the effective portion of the gain or loss on the change in fair value is initiallyreported as a component of accumulated other comprehensive income in partners’ capital and subsequently reclassified intoearnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss, if any, is reported in earningsin the current period. The Partnership considers its cash flow hedges to be highly effective at inception and as of December31, 2017.The Partnership’s outstanding cash flow hedges at December 31, 2017 expire on dates between 2019 and 2022.Interest Rate RiskThe Partnership is exposed to fluctuations in interest rates on borrowings under its Senior Secured Credit Facilities.The Partnership entered into a pay-fixed, receive-variable interest rate swap in September 2016 to hedge the interest rate riskassociated with its variable rate borrowings under its Senior Secured Credit Facilities. The Partnership elected to discontinuehedge accounting as of December 14, 2016 following the repayment of a portion of its outstanding indebtedness under itsSenior Secured Credit Facilities, and subsequently re-designated the interest rate swap for the remaining portion of suchoutstanding indebtedness during the three months ended March 31, 2017. The Partnership’s interest rate swap expiresconcurrently with the maturity of the Senior Secured Credit Facilities in April 2020.The counterparty to the Partnership’s interest rate swap is a major financial institution.The fair values of cash flow hedging instruments included in the consolidated balance sheet as of December 31,2017 were as follows: Asset Liability Balance Sheet Location Derivatives DerivativesDerivatives designated as hedging instruments: Forward contracts: 105 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Foreign currency exchange forward contracts Other long-term liabilities $ — $2,118Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 1,024 —Interest rate swap: Interest rate swap Other current assets 220 —Interest rate swap Other long-term assets 407 —Total derivatives designated as hedging instruments $1,651 $2,118 Derivatives not designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Prepaid and other current assets $124 $ —Foreign currency exchange forward contracts Accrued and other current liabilities — 806Foreign currency exchange forward contracts Other long-term liabilities — 528Purchased options: Foreign currency purchased option contracts Prepaid and other current assets 3 —Foreign currency purchased option contracts Other long-term assets 45 —Total derivatives not designated as hedging instruments $172 $1,334 The fair values of cash flow hedging instruments included in the condensed consolidated balance sheet as ofDecember 31, 2016 were as follows: Asset Liability Balance Sheet Location Derivatives DerivativesDerivatives designated as hedging instruments: Forward contracts: Foreign currency exchange forward contracts Prepaid and other current assets $188 $ —Foreign currency exchange forward contracts Other long-term assets 632 —Foreign currency exchange forward contracts Other long-term liabilities 626 —Purchased options: Foreign currency purchased option contracts Other long-term liabilities — 51Total derivatives designated as hedging instruments $1,446 $51Derivatives not designated as hedging instruments: Interest rate swap Other long-term assets $484 $ — 106 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) The effects of instruments designated as cash flow hedges and the related changes in accumulated othercomprehensive income and the gains and losses recognized in income for the year ended December 31, 2017 were as follows: Amount of Location of Gain (Loss) Location of Gain Amount of Gain Amount of Gain Gain (Loss) Reclassified from (Loss) Recognized in (Loss) Recognized in (Loss) in Other Reclassified from Accumulated Other Income on Derivative Income on Derivative Comprehensive Accumulated Other Comprehensive (Ineffective Portion (Ineffective Portion Income on Comprehensive Income and Amount and Amount Derivative Income into Income Excluded from Excluded from (Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing)Foreign currency exchange forwardcontracts $(4,126) Product sales $(15) Other income(expense) $(1,237)Foreign currency exchangepurchased option contracts (1,411) Other revenue — Other income(expense) (368)Interest rate swap 74 Other income(expense) (221) Other income(expense) 13 The effects of instruments designated as cash flow hedges and the related changes in accumulated othercomprehensive income and the gains and losses in income for the year ended December 31, 2016 were as follows: Amount of Location of Gain (Loss) Location of Gain Location of Gain Amount of Gain Gain (Loss) Reclassified from (Loss) Recognized in (Loss) Recognized in (Loss) in Other Reclassified from Accumulated Other Income on Derivative Income on Derivative Comprehensive Accumulated Other Comprehensive (Ineffective Portion (Ineffective Portion Income on Comprehensive Income and Amount and Amount Derivative Income into Income Excluded from Excluded from (Effective Portion) (Effective Portion) (Effective Portion) Effectiveness Testing) Effectiveness Testing)Foreign currency exchangeforward contracts $770 Product sales $— Product sales $ 1Foreign currency exchangeforward contracts — Other revenue — Other revenue —Interest rate swap — Other income(expense) — Other income(expense) —Foreign currency exchangepurchased option contracts (175) Product sales — Product sales —Certain cash flow hedges related to foreign currency exchange risk previously designated as hedges ceased toqualify for hedge accounting treatment and the Partnership discontinued hedge accounting for such hedged transactions onDecember 31, 2017. As of December 31, 2017, $1.6 million of loss included in accumulated other comprehensive incomewas reclassified to earnings. As of December 31, 2017, the estimated net amounts of existing gains and losses in accumulatedother comprehensive income associated with derivative instruments expected to be transferred to the consolidated statementof income is a gain of $0.1 million during the next twelve months.The Partnership enters into master netting arrangements, which are designed to permit net settlement of derivativetransactions among the respective counterparties. If the Partnership had settled all transactions with its respectivecounterparties at December 31, 2017, the Partnership would have made a net settlement termination payment of $1.6 million,which differs from the recorded fair value of the derivatives. The Partnership presents its derivative assets and liabilities attheir gross fair values.107 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) The notional amounts of outstanding derivative instruments associated with outstanding or unsettled derivativeinstruments as of December 31, 2017 were as follows:Foreign exchange forward contracts in GBP £46,465Foreign exchange purchased option contracts in GBP £34,050Foreign exchange forward contracts in EUR €5,350Interest rate swap $44,756 The Prior Credit Agreement required the Predecessor to swap a minimum of 50% of the term loan balanceoutstanding under the Prior Senior Secured Credit Facilities. In connection with the issuance of the Prior Senior SecuredCredit Facilities (see Note 12, Long-Term Debt and Capital Lease Obligations), the Predecessor entered into floating-to-fixedinterest rate swaps (the Partnership received a floating market rate and paid a fixed interest rate) to manage the interest rateexposure related to the Prior Senior Secured Credit Facilities. All indebtedness outstanding under the Prior Senior SecuredCredit Facilities was repaid in full on April 9, 2015, and the Partnership terminated the related rate interest rate swaps andpaid a termination fee of $0.1 million.The Partnership did not have derivative instruments designated as cash flow hedges during the year endedDecember 31, 2015.(9) Fair Value MeasurementsThe amounts reported in the consolidated balance sheets as cash and cash equivalents, accounts receivable, related-party receivables, prepaid expenses and other current assets, accounts payable, related-party payables and accrued liabilities,related-party accrued liabilities and other current liabilities approximate fair value because of the short-term nature of theseinstruments.Derivative instruments and long-term debt and capital lease obligations including the current portion are classifiedas Level 2 instruments. The fair value of the Senior Notes (see Note 12, Long-Term Debt and Capital Lease Obligations –Senior Notes) was determined based on observable market prices in a less active market and was categorized as Level 2 in thefair value hierarchy. The fair value of other long-term debt and capital lease obligations classified as Level 2 was determinedbased on the usage of market prices not quoted on active markets and other observable market data. The carrying amount ofderivative instruments approximates fair value as of December 31, 2017 and December 31, 2016 were as follows: December 31, 2017 December 31, 2016 Carrying Fair Carrying Fair Amount Value Amount ValueSenior Notes $352,224 $374,624 $293,797 $306,547Other long-term debt and capital lease obligations 48,793 48,793 57,283 57,283Total long-term debt and capital lease obligations $401,017 $423,417 $351,080 $363,830 The fair value of the long-term debt and capital lease obligations are estimated based upon rates currently availablefor debt and capital lease obligations with similar terms and remaining maturities.108 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (10) Goodwill and Other Intangible AssetsIntangible AssetsIntangible assets consisted of the following at: December 31, 2017 December 31, 2016 Gross Net Gross Net Amortization Carrying Accumulated Carrying Carrying Accumulated Carrying Period Amount Amortization Amount Amount Amortization AmountFavorable customer contracts 3years $8,700 $(8,591) $109 $8,700 $(7,468) $1,232Wood pellet contract 6years 1,750 (1,750) — 1,750 (1,611) 139Total intangible assets $10,450 $(10,341) $109 $10,450 $(9,079) $1,371 Intangible assets include favorable customer contracts acquired in connection with the Partnership’s purchase ofGreen Circle in January 2015. The Partnership also recorded payments made to acquire a six-year wood pellet contract with aEuropean utility in 2010 as an intangible asset. These costs are recoverable through the future revenue streams generatedfrom the associated contract and are closely related to the revenue from the customer contracts. The Partnership amortizes thecustomer contract intangible assets as deliveries are completed during the respective contract terms. During the years endedDecember 31, 2017, 2016 and 2015, of $1.3 million, $2.0 million and $6.0 million, respectively, of amortization wasincluded in cost of goods sold in the accompanying consolidated statements of income. The remaining amortization expenseof $0.1 million will be recognized in 2018.GoodwillIn 2015, the Partnership recorded an addition to goodwill of $80.7 million as part of the acquisition of Cottondaleby the sponsor and its contribution to the Partnership as part of the Reorganization. Goodwill also includes $4.9 million fromthe acquisitions in 2010 of a business from IN Group Companies and of a company now known as Enviva Pellets Amory. ThePartnership’s reported goodwill balance of $85.6 million at December 31, 2017 and 2016 was allocated to the Partnership’sone reporting unit, which also represents the Partnership’s one segment.(11) Assets Held for SaleThe Partnership had a controlling interest in Wiggins, an entity that owned a wood pellet plant in Stone County,Mississippi. In December 2016, the Partnership, with the authorization of the Partnership’s board of directors, initiated a planto sell the Wiggins plant, which triggered an evaluation of a potential asset impairment. The Partnership reclassified theWiggins plant assets to current assets held for sale and ceased depreciation. Also in December 2016, the Partnership executedan agreement to sell Wiggins, with the closing of the transaction scheduled for January 20, 2017. The carrying amount of theassets held for sale exceeded the estimated fair value which resulted in a $10.0 million non-cash charge to earnings, which isincluded in impairment of assets held for sale on the consolidated statements of income. On January 20, 2017, the salesagreement terminated when the prospective buyer failed to pay the purchase price. Subsequently, the Partnership ceasedoperations but the Wiggins plant remained available for immediate sale.The Partnership worked with prospective buyers throughout 2017, including the buyer from the December 2016agreement. On December 27, 2017, the Partnership sold the Wiggins plant to a third-party buyer for a purchase price of $0.4million and recorded a loss on the sale of $0.8 million, net, upon deconsolidation, consisting of a loss on the sale of $3.4million and a $2.6 million gain upon deconsolidation, which is included in general and administrative expenses on theconsolidated statements of income. On December 28, 2017, Wiggins was dissolved. During December 2016, the Partnership recorded an impairment of $10.0 million related to the fixed assets at theWiggins plant (see Note 11, Assets Held for Sale). The Partnership did not record any impairments related to assets held forsale for the years ended December 31, 2017 and 2015 (see Note 10, Goodwill and Other Intangible Assets).109 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (12) Long-Term Debt and Capital Lease ObligationsSenior Notes Due 2021On November 1, 2016, the Partnership and Enviva Finance Corp. (together with the Partnership, the “Issuers”),Wilmington Trust, National Association, as trustee, and the guarantors party thereto entered into an indenture, as amended orsupplemented (the “Indenture”) pursuant to which the Issuers issued $300.0 million in aggregate principal amount of 8.5%senior unsecured notes due November 1, 2021 (the “Senior Notes”) to eligible purchasers (the “Senior Notes Offering”) in aprivate placement under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”).Interest payments commenced on May 1, are due semi-annually in arrears on May 1 and November 1. In August 2017,holders of 100% of the Senior Notes tendered such notes in exchange for newly issued registered notes with termssubstantially identical in all material respects to the Senior Notes (except that the registered notes are not subject torestrictions on transfer). The Partnership recorded $6.4 million in issue discounts and costs associated with the issuance of theSenior Notes, which have been recorded as a deduction to long-term debt and capital lease obligations. The Partnership used $139.6 million of the net proceeds from the Senior Notes, together with cash on hand, to pay aportion of the purchase price for the Sampson Drop-Down and $159.8 million to repay borrowings, including accruedinterest, under the Senior Secured Credit Facilities.On October 10, 2017, pursuant to the Indenture, the Issuers issued and sold an additional $55.0 million in aggregateprincipal amount of Senior Notes to a purchaser (the “Additional Notes Purchaser”) at 106.25% of par value plus accruedinterest from May 1, 2017. The additional Senior Notes have the same terms as the Senior Notes. The sale of the additionalSenior Notes resulted in gross proceeds to the Issuers of approximately $60.0 million. The proceeds were used to repayborrowings under the Partnership’s revolving credit commitments under the Senior Secured Credit Facilities, which wereused to fund the Wilmington Drop-Down, and for general partnership purposes.In December 2017, the Additional Notes Purchaser tendered such notes in exchange for newly issued registerednotes with terms substantially identical in all material respects to the Senior Notes (except that the registered notes are notsubject to restrictions on transfer). The additional Senior Notes will be treated together with the Senior Notes as a single classfor all purposes under the Indenture. The Partnership recorded $0.9 million in original issue discounts and costs and $3.4million in premiums associated with the issuance of the additional Senior Notes, which have been recorded as a net additionto long-term debt and capital lease obligations.At any time prior to November 1, 2018, the Issuers may redeem up to 35% of the aggregate principal amount of theSenior Notes (including any additional notes) issued under the Indenture at a redemption prices of 108.5% of the principalamount, plus accrued and unpaid interest, if any, to the redemption date, in an amount not greater than the net cash proceedsof one or more equity offerings by the Partnership, provided that:·at least 65% of the aggregate principal amount of the Senior Notes issued under the Indenture on November 1,2016, remains outstanding immediately after the occurrence of such redemption (excluding notes held by thePartnership and its subsidiaries); and·the redemption occurs within 120 days of the date of the closing of such equity offering(s).On and after November 1, 2018, the Issuers may redeem all or a portion of the Senior Notes at the redemption prices(expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, on the Senior Notesredeemed to the applicable redemption date (subject to the right of holders of record on the relevant record date to receiveinterest due on an interest payment date that is on or prior to the redemption date), if redeemed during the twelve-monthperiod beginning November 1 on the years indicated below:110 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Year: Percentages 2018 104.250%2019 102.125%2020 and thereafter 100.000% The Senior Notes contain certain non-financial covenants applicable to the Partnership including, but not limited to(1) restricted payments, (2) incurrence of indebtedness and issuance of preferred securities, (3) liens, (4) dividend and otherpayment restrictions affecting subsidiaries, (5) merger, consolidation or sale of assets, (6) transactions with affiliates, (7)designation of restricted and unrestricted subsidiaries, (8) additional subsidiary guarantees, (9) business activities and (10)reporting obligations.As of December 31, 2017 and 2016, the Partnership was in compliance with all covenants and restrictions associatedwith, and no events of default existed under, the Indenture. The Partnership’s obligations under the Indenture are guaranteedby certain of the Partnership’s subsidiaries and secured by liens on substantially all of the Partnership’s assets.Senior Secured Credit FacilitiesOn April 9, 2015, the Partnership entered into a Credit Agreement (the “Credit Agreement”) providing for $199.5million aggregate principal amount of senior secured credit facilities (the “Original Credit Facilities”). The Original CreditFacilities consisted of $174.5 million aggregate principal amount of borrowings and revolving credit commitments in anaggregate principal amount at any time outstanding, taken together with the face amount of letters of credit, not in excess of$25.0 million.On December 11, 2015, the Partnership entered into the First Incremental Term Loan Assumption Agreement (the“Assumption Agreement”) providing for $36.5 million aggregate principal amount of incremental borrowings (the“Incremental Term Advances” and, together with the Original Credit Facilities, the “Senior Secured Credit Facilities”) underthe Credit Agreement. In addition, on December 11, 2015, FiberCo, an affiliate and a wholly owned subsidiary of thePartnership’s sponsor, purchased $15.0 million aggregate principal amount of the borrowings, net of a 1.0% lender fee. OnJune 30, 2016, FiberCo assigned all of its rights and obligations in its capacity as a lender to a third party. The Partnershiprecorded $0.4 million as interest expense to this indebtedness during the year ended December 31, 2016.On October 17, 2016, the Partnership entered into the Second Amendment to the Credit Agreement (the “SecondAmendment”) under the Partnership’s Senior Secured Credit Facilities. Following the Sampson Drop-Down, the SecondAmendment provided for an increase from $25.0 million to $100.0 million of the revolving credit commitments.On December 14, 2016, proceeds from the Senior Notes were used to repay outstanding indebtedness, includingaccrued interest of $159.9 million under the Senior Secured Credit Facilities. For the year ended December 31, 2016, thePartnership recorded a $4.4 million loss on early retirement of debt obligation related to the repayments.The Senior Secured Credit Facilities include a commitment fee payable on undrawn revolving credit facilitycommitments of 0.50% per annum (subject to a stepdown of 0.375% per annum if the Total Leverage Ratio is less than orequal to 2.00:1.00). Letters of credit issued under the revolving credit facility are subject to a fee calculated at the applicablemargin for revolving credit facility Eurodollar rate borrowings. The Partnership had $0 outstanding under the revolvingcredit commitments as of December 31, 2017 and $6.5 million at December 31, 2016.The Partnership had a $4.0 million letter of credit outstanding under the letters of credit facility as of December 31,2017 and 2016. The letter of credit was issued in connection with a contract between the Partnership and third parties, in theordinary course of business. On January 11, 2018, the letter of credit was cancelled as it was no longer contractually required.111 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) The Senior Secured Credit Facilities mature in April 2020. Borrowings under the Senior Secured Credit Facilitiesbear interest, at the Partnership’s option, at either a base rate plus an applicable margin or at a Eurodollar rate (with a 1.00%floor for term loan borrowings) plus an applicable margin. Principal and interest are payable quarterly.The Partnership can request loans under incremental facilities under the Credit Agreement on the terms andconditions and in the maximum aggregate principal amounts set forth therein, provided that lenders provide commitments tomake loans under such incremental facilities. The Partnership is required to make mandatory prepayments of the SeniorSecured Credit Facilities with the proceeds of certain asset sales and debt incurrences. The Partnership may voluntarilyprepay the Senior Secured Credit Facilities in whole or in part at any time without premium or penalty.The Credit Agreement contains certain covenants, restrictions and events of default including, but not limited to, achange of control restriction and limitations on the Partnership’s ability to (i) incur indebtedness, (ii) pay dividends or makeother distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incurliens, (vii) enter into transactions with affiliates, (viii) consolidate or merge and (ix) assign certain material contracts to thirdparties or unrestricted subsidiaries. The Partnership will be restricted from making distributions if an event of default existsunder the Credit Agreement or if the interest coverage ratio (determined as the ratio of consolidated EBITDA, as defined inthe Credit Agreement, to consolidated interest expense, determined quarterly) is less than 2.25:1.00 at such time.Pursuant to the Credit Agreement, the Partnership is required to maintain, as of the last day of each fiscal quarter, aratio of total debt to consolidated EBITDA (“Total Leverage Ratio”), as defined in the Credit Agreement, of not more than amaximum ratio, initially set at 4.25:1.00 and stepping down to 3.75 :1.00 during the term of the Credit Agreement; providedthat the maximum permitted Total Leverage Ratio will be increased by 0.50:1.00 for the period from the consummation ofcertain qualifying acquisitions through the end of the second full fiscal quarter thereafter.As of December 31, 2017 and December 31, 2016, the Partnership was in compliance with all covenants andrestrictions associated with, and no events of default existed under, the Credit Agreement. The obligations under the CreditAgreement are guaranteed by certain of the Partnership’s subsidiaries and secured by liens on substantially all assets.Prior Senior Secured Credit FacilitiesIn November 2012, the Predecessor entered into the Credit and Guaranty Agreement (the “Prior Credit Agreement”)that provided for a $120.0 million aggregate principal amount of senior secured credit facilities (the “Prior Senior SecuredCredit Facilities”). All outstanding indebtedness under the Prior Senior Secured Credit Facilities was repaid in full, includingrelated accrued interest, in the amount of $82.2 million on April 9, 2015. The Partnership funded the repayment with aportion of borrowings under the Original Credit Facilities. For the year ended December 31, 2015, the Partnership recorded a$4.7 million loss on early retirement of debt obligation related to the repayment.Related-Party Notes PayableOn January 22, 2016, a non-controlling interest holder in Wiggins became the holder of the $3.3 million Wigginsconstruction loan and working capital line. Related-party interest expense associated with the related-party notes payablewas insignificant during the year ended December 31, 2016. The construction loan and working capital line outstandingprincipal of $3.1 million and an insignificant amount of accrued interest were repaid in full by Wiggins on the October 18,2016 maturity date.In connection with the January 5, 2015 acquisition of Cottondale (formerly owned by Green Circle), the sponsormade a term advance of $36.7 million to Cottondale under a revolving note. The revolving note accrued interest at an annualrate of 4.0%. In connection with the acquisition, the sponsor also advanced its wholly owned subsidiary,112 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Acquisition II, $50.0 million under a note payable accruing interest at an annual rate of 4.0%. Cottondale repaid $4.8 millionof the outstanding principal in March 2015. As a result of the sponsor’s contribution of Acquisition II, which ownedCottondale, to the Partnership on April 9, 2015, the Partnership recorded $81.9 million of outstanding principal and $0.9million of accrued interest related to these notes.In connection with the closing of the IPO on May 4, 2015, the related-party notes payable outstanding principal of$81.9 million and related accrued interest of $1.1 million were repaid by the Partnership to the sponsor. During the yearended December 31, 2015, $1.1 million of related-party interest expense associated with the related-party notes payable wasincurred.Long-term debt, at carrying value are composed of the following at December 31: 2016 2017 (Recast)Senior Notes, net of unamortized discount, premium and debt issuance of $2.8 million as ofDecember 31, 2017 and $6.2 million as of December 31, 2016 $352,224 $293,797Senior Secured Credit Facilities, Tranche A-1 Advances, net of unamortized discount and debtissuance costs of $1.0 million as of December 31, 2017 and $1.4 million as ofDecember 31, 2016 39,263 41,651Senior Secured Credit Facilities, Tranche A-3 Advances, net of unamortized discount and debtissuance costs of $0.1 million as of December 31, 2017 and $0.2 million as ofDecember 31, 2016 4,372 4,489Senior Secured Credit Facilities, revolving credit commitments, at a Eurodollar Rate of 7.0% atDecember 31, 2016 — 6,500Other loans 2,023 2,759Capital leases 3,135 1,884Total long-term debt and capital lease obligations 401,017 351,080Less current portion of long-term debt and capital lease obligations (6,186) (4,165)Long-term debt and capital lease obligations, excluding current installments $394,831 $346,915 The aggregate maturities of long-term debt and capital lease obligations, net of unamortized discount and debtissuance costs, are as follows:Year Ended December 31: 2018 $5,0972019 5,3012020 35,8282021 354,7882022 3Thereafter —Total long-term debt and capital lease obligations $401,017 Depreciation expense relating to assets held under capital lease obligations was $0.7 million, $0.2 million and $0.1million for each of the years ended December 31, 2017, 2016 and 2015, respectively. 113 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (13) Related-Party TransactionsRelated-party amounts included on the consolidated statements of income were the following for each of the yearsended December 31,: 2017 2016 (Recast) 2015 (Recast) Other revenue $5,912 $ — $ —Cost of goods sold 69,445 41,467 22,268General and administrative expenses 15,132 17,236 16,587 Management Services AgreementOn April 9, 2015, the Partnership, the General Partner, Enviva, LP, Enviva GP, LLC and certain subsidiaries ofEnviva, LP (collectively, the “Service Recipients”) entered into a five-year Management Services Agreement (the “MSA”)with Enviva Management (the “Provider”), a wholly owned subsidiary of the sponsor, pursuant to which the Providerprovides the Service Recipients with operations, general administrative, management and other services (the “Services”).Under the terms of the MSA, the Service Recipients are required to reimburse the Provider the amount of all direct or indirectinternal or third-party expenses incurred by the Provider in connection with the provision of the Services, including, withoutlimitation: (i) the portion of the salary and benefits of the employees engaged in providing the Services reasonably allocableto the Service Recipients; (ii) the charges and expenses of any third party retained to provide any portion of the Services; (iii)office rent and expenses and other overhead costs incurred in connection with, or reasonably allocable to, providing theServices; (iv) amounts related to the payment of taxes related to the business of the Service Recipients; and (v) costs andexpenses incurred in connection with the formation, capitalization, business or other activities of the Provider pursuant to theMSA.Direct or indirect internal or third-party expenses incurred are either directly identifiable or allocated to thePartnership by the Provider. The Provider estimates the percentage of salary, benefits, third-party costs, office rent andexpenses and any other overhead costs incurred by the Provider associated with the Services to be provided to thePartnership. Each month, the Provider allocates the actual costs accumulated in the financial accounting system using theseestimates. The Provider also charges the Partnership for any directly identifiable costs such as goods or services provided atthe Partnership’s request.During the year ended December 31, 2017, the Partnership incurred $65.5 million related to the MSA. Of thisamount, $49.9 million is included in cost of goods sold and $15.1 million is included in general and administrative expenseson the consolidated statements of income. At December 31, 2017, $0.5 million incurred under the MSA is included infinished goods inventory.During the year ended December 31, 2016, the Partnership incurred $56.0 million related to the MSA. Of thisamount, $37.9 million is included in cost of goods sold and $17.2 million is included in general and administrative expenseson the consolidated statements of income. At December 31, 2016, $0.9 million incurred under the MSA is included infinished goods inventory.During the year ended December 31, 2015, the Partnership incurred $39.4 million related to the MSA. Of thisamount, $22.3 million is included in cost of goods sold and $16.6 million is included in general and administrative expenseson the consolidated statements of income.As of December 31, 2017, the Partnership had $19.6 million included in related-party payables primarily related tothe MSA. As of December 31 2016, the Partnership had $10.9 million included in related-party payables primarily related tothe MSA.114 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Common Control TransactionsCottondaleOn January 5, 2015, the sponsor acquired Green Circle, which owned the Cottondale plant. Acquisition Icontributed Green Circle to the Partnership in April 2015 in exchange for subordinated units in the Partnership. Prior to suchcontribution, the sponsor converted Green Circle into a Delaware limited liability company and changed the name of theentity to “Enviva Pellets Cottondale, LLC” (see Note 1, Description of Business and Basis of Presentation).Southhampton Drop-DownIn connection with the closing of the Senior Secured Credit Facilities (see Note 12, Long-Term Debt and CapitalLease Obligations), on December 11, 2015, under the terms of a contribution agreement between the Partnership and the FirstHancock JV, the First Hancock JV contributed to Enviva, LP, all of the issued and outstanding limited liability companyinterests in Southampton for total consideration of $131.0 million (see Note 1, Description of Business and Basis ofPresentation).Sampson Drop-DownOn December 14, 2016, the First Hancock JV contributed to Enviva, LP all of the issued and outstanding limitedliability company interests in Sampson for total consideration of $175.0 million (see Note 1, Description of Business andBasis of Presentation).Wilmington Drop-DownOn October 2, 2017, the First Hancock JV contributed to Enviva, LP all of the issued and outstanding limitedliability company interests in Wilmington for total consideration of $130.0 million (see Note 1, Description of Business andBasis of Presentation).Related-Party IndemnificationIn connection with the Sampson Drop-Down, the First Hancock JV agreed to indemnify the Partnership, its affiliates,and its respective officers, directors, managers, counsel, agents and representatives from all costs and losses arising fromcertain vendor liabilities and claims (“Retained Matters”) related to the construction of the Sampson plant that were includedin the net assets contributed. At December 31, 2016, accrued liabilities related to such indemnifiable amounts included $6.4million related to work performed by certain vendors. The Partnership recorded a corresponding related-party receivable fromthe First Hancock JV of $6.4 million for reimbursement of such indemnifiable amounts. At December 31, 2017, the related-party receivable associated with such amounts was $3.0 million.In connection with the Wilmington Drop-Down, the First Hancock JV agreed to indemnify the Partnership, itsaffiliates, and its respective officers, directors, managers, counsel, agents and representatives from all costs and losses arisingfrom certain vendor liabilities and claims related to the construction of the Port of Wilmington that were included in the netassets contributed. The Partnership recorded a corresponding related-party receivable from the First Hancock JV of $1.8million for reimbursement of such indemnifiable amounts. At December 31, 2017, the related-party receivable associatedwith such amounts was $1.3 million.Sampson Construction PaymentsPursuant to three payment agreements between the Partnership and the First Hancock JV dated effective as of July27, 2017, September 30, 2017, and December 31, 2017 (together, the “Payment Agreements”), the First Hancock JV agreed topay an aggregate amount of $1.4 million to the Partnership in consideration for costs incurred by the115 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Partnership to repair or replace certain equipment at the Sampson plant following the consummation of the Sampson Drop-Down.Terminal Services AgreementsOn December 14, 2016, Enviva, LP and Wilmington entered into a terminal services agreement (the “SampsonTSA”) regarding wood pellets produced at the Sampson plant and transported by truck to the Wilmington terminal. Pursuantto the Sampson TSA, the wood pellets were received, stored and ultimately loaded onto oceangoing vessels for transport tothe Partnership’s customers. The Sampson TSA was terminated in connection with the Wilmington Drop-Down on October 2,2017.In connection with the Wilmington Drop-Down, Wilmington and the sponsor entered into a terminal servicesagreement dated October 2, 2017 providing for wood pellet receipt, storage, handling and loading services by theWilmington terminal on behalf of the sponsor (the “Holdings TSA”). Pursuant to the Holdings TSA, which remains in effectuntil September 1, 2026, the sponsor agreed to deliver a minimum of 125,000 MT per quarter and pay a fixed fee on a per-tonbasis for the terminal services. During the year ended December 31, 2017, the Partnership recorded $2.8 million as terminalservices revenue, which is included in “Other revenue.” The Partnership had no terminal services revenue under the HoldingsTSA during the years ended December 31, 2016 and 2015.The Holdings TSA was amended and assigned to Enviva Pellets Greenwood, LLC, a wholly owned subsidiary ofEnviva JV Development Company, LLC, a joint venture between the Partnership’s sponsor, Hancock Natural ResourceGroup, Inc. and certain other affiliates of John Hancock Life Insurance Company (U.S.A.) (the “Second Hancock JV”).Enviva FiberCo, LLCThe Partnership purchases raw materials from FiberCo. Raw material purchases during the years ended December 31,2017 and 2016 from FiberCo were $8.5 million and $3.7 million, respectively. Raw material purchases from FiberCo wereinsignificant for the year ended December 31, 2015.Biomass Purchase Agreement – Hancock JVOn April 9, 2015, Enviva, LP entered into a master biomass purchase and sale agreement (the “Biomass PurchaseAgreement”) and a confirmation thereunder with the First Hancock JV pursuant to which the First Hancock JV sold toEnviva, LP, at a fixed price per metric ton, certain volumes of wood pellets per month. The Partnership sold the wood pelletspurchased from the First Hancock JV to customers under the Partnership’s existing off-take contracts. Such confirmation wasterminated on December 11, 2015.On September 7, 2016, Sampson entered into a confirmation under the Biomass Purchase Agreement pursuant towhich Sampson agreed to sell to the sponsor 60,000 MT of wood pellets through August 31, 2017. On June 23, 2017, thesponsor satisfied its take-or-pay obligation under the agreement with a $2.7 million payment to the Partnership, which isincluded in “Other revenue.”On September 26, 2016, Enviva, LP and Sampson entered into two confirmations under the Biomass PurchaseAgreement pursuant to which Enviva, LP agreed to sell to Sampson 140,000 MT of wood pellets, and Sampson agreed to sellto Enviva, LP 140,000 MT of wood pellets. The confirmation pursuant to which Enviva, LP agreed to sell wood pellets toSampson under the Biomass Purchase Agreement was terminated in connection with the Sampson Drop-Down.116 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Biomass Option Agreement – Enviva Holdings, LPOn February 3, 2017, Enviva, LP entered into a master biomass purchase and sale agreement and a confirmationthereunder, which confirmation was amended on April 1, 2017, each with the sponsor (together, the “Option Contract”),pursuant to which Enviva, LP has the option to purchase certain volumes of wood pellets from the sponsor, from time to timeat a price per metric ton determined by reference to a market index. The sponsor has a corresponding right to re-purchasevolumes purchased by Enviva, LP pursuant to the Option Contract at a price per metric ton determined by reference to suchmarket index at then-prevailing rates in the event that Enviva, LP purchases more than 45,000 MT of wood pellets pursuantto the Option Contract.During the year ended December 31, 2017, pursuant to the Option Contract, Enviva, LP purchased $11.1 million ofwood pellets from the sponsor, which amount is included in cost of goods sold in the Partnership’s consolidated statementsof income. The Partnership did not purchase wood pellets from the sponsor during the years ended December 31, 2016 and2015.EVA-MGT ContractsIn January 2016 the Partnership entered into a contract with the First Hancock JV to supply 375,000 MTPY of woodpellets (the “EVA‑MGT Contract”) to MGT Teesside Limited’s Tees Renewable Energy Plant (the “Tees REP”), which isunder development. The EVA‑MGT Contract commences in 2019, ramps to full supply in 2021 and continues through 2034.The EVA-MGT Contract is denominated in U.S. Dollars for commissioning volumes in 2019 and in GBP thereafter.The Partnership entered into a second supply agreement with the First Hancock JV in connection with the SampsonDrop‑Down to supply an additional 95,000 MTPY of the contracted volume to the Tees REP. The contract, which isdenominated in GBP, commences in 2019 and continues through 2034. (14) Income TaxesThe Partnership’s operations are organized as limited partnerships and entities that are disregarded entities forfederal and state income tax purposes. As a result, the Partnership is not subject to U.S. federal and most state income taxes.The partners and unitholders of the Partnership are liable for these income taxes on their share of the Partnership’s taxableincome. Some states impose franchise and capital taxes on the Partnership. Such taxes are not material to the consolidatedfinancial statements and have been included in other income (expense) as incurred.For calendar year 2017, the only periods subject to examination for federal and state income tax returns are 2015through 2017. The Partnership believes its income tax filing positions, including its status as a pass-through entity, would besustained on audit and does not anticipate any adjustments that would result in a material change to its consolidated balancesheet. Therefore, no reserves for uncertain tax positions, nor interest and penalties, have been recorded. For the years endedDecember 31, 2017 and 2016, no provision for federal or state income taxes has been recorded in the consolidated financialstatements.The Partnership’s consolidated financial statements include Enviva Finance Corp., which is a wholly owned Ccorporation that was formed for the purpose of being the co-issuer of the Partnership’s Senior Notes. There were no activitiesgenerated by Enviva Finance Corp. during 2017 and 2016, as a result, no provision for federal or state income taxes has beenrecorded in the consolidated financial statements.The Partnership’s consolidated statement of income for the year ended December 31, 2015, includes income taxexpense of $2.7 million related to the activities of the Cottondale plant from the date of acquisition on January 5, 2015through April 8, 2015. This amount is reflected as a capital contribution. During this period, Green Circle was a corporatesubsidiary of the predecessor entity of Acquisition II. Green Circle, which is now Enviva Cottondale117 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Acquisition I, LLC, and Acquisition II were each treated as a corporation for federal income tax purposes until April 7, 2015and April 8, 2015, respectively. Prior to the contribution of Acquisition II to the Partnership on April 9, 2015, the financialresults of the predecessor entity of each of Acquisition II and Green Circle were included in the consolidated federal incometax return of the tax paying entity, Acquisition I.(15) Partners’ CapitalIn connection with the closing of the IPO, the Partnership recapitalized the outstanding limited partner interests heldby the sponsor into 405,138 common units and 11,905,138 subordinated units representing a 51.7% ownership interest inthe Partnership as of the closing of the IPO. On December 11, 2015, the Partnership issued 942,023 common units to a whollyowned subsidiary of the sponsor in connection with the Southampton Drop-Down. In addition, the sponsor is the owner ofthe General Partner and the General Partner holds the IDRs.Subordinated UnitsAll of the subordinated units will convert into common units on a one‑for‑one basis at the end of the subordinationperiod, which is expected to occur in May 2018. Our sponsor has registration rights with respect to the common units itcurrently holds and the common units it will hold upon conversion of the subordinated units.Allocations of Net IncomeThe First Amended and Restated Agreement of Limited Partnership of the Partnership (the “Partnership Agreement”)contains provisions for the allocation of net income and loss to the unitholders of the Partnership and the General Partner. Forpurposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall beallocated among the partners of the Partnership in accordance with their respective percentage ownership interest. Suchallocations are made after giving effect, if any, to priority income allocations in an amount equal to incentive cashdistributions, which are allocated 100% to the General Partner.Incentive Distribution RightsIncentive distribution rights (“IDRs”) represent the right to receive increasing percentages (from 15.0% to 50.0%) ofquarterly distributions from operating surplus after distributions in amounts exceeding specified target distribution levelshave been achieved by the Partnership. The General Partner currently holds the IDRs, but may transfer these rights at anytime.At-the-Market Offering ProgramOn August 8, 2016, the Partnership filed a prospectus supplement to the shelf registration filed with the SEC on June24, 2016, for the registration of the continuous offering of up to $100.0 million of common units, in amounts, at prices, andon terms to be determined by market conditions and other factors at the time of the offerings. In August 2016, the Partnershipentered into an equity distribution agreement (the “Equity Distribution Agreement”) with certain managers pursuant towhich the Partnership may offer and sell common units from time to time through or to one or more of the managers, subjectto the terms and conditions set forth in the Equity Distribution Agreement, of up to an aggregate sales amount of $100.0million (the “ATM Program”).During the year ended December 31, 2017, the Partnership sold 71,368 common units under the Equity DistributionAgreement for net proceeds of $1.9 million, net of an insignificant amount of commissions. Accounting and other fees ofapproximately $0.2 million were offset against the proceeds. Net proceeds from sales under the ATM Program were used forgeneral partnership purposes.118 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) During the year ended December 31, 2016, the Partnership sold 358,593 common units under the EquityDistribution Agreement for net proceeds of $9.3 million, net of $0.1 million of commissions. Deferred issuance costs ofapproximately $0.4 million, primarily consisting of legal, accounting and other fees, were offset against the proceeds. Netproceeds from sales under the ATM Program were used for general partnership purposes.Sampson Drop-DownAs partial consideration for the Sampson Drop-Down, the Partnership issued 1,098,415 unregistered common unitsat a price of $27.31 per unit, or $30.0 million of common units, to affiliates of John Hancock Life Insurance Company(U.S.A.) (see Note 4, Transactions Between Entities Under Common Control).Cash Distributions to UnitholdersThe partnership agreement sets forth the calculation to be used to determine the amount of cash distributions thatthe common and subordinated unitholders and sponsor will receive.Distributions that have been paid or declared related to the reporting period are considered in the determination ofearnings per unit. The following table details the cash distribution paid or declared (in millions, except per unit amounts): Total Payment to General Partner for Incentive Declaration Record Payment Distribution Total Cash DistributionQuarter Ended Date Date Date Per Unit Distribution RightsMarch 31, 2016 May 4, 2016 May 16, 2016 May 27, 2016 $0.5100 $12.6 $0.2June 30, 2016 August 3, 2016 August 15, 2016 August 29, 2016 $0.5250 $13.0 $0.3September 30, 2016 November 2, 2016 November 14, 2016 November 29, 2016 $0.5300 $13.3 $0.3December 31, 2016 February 1, 2017 February 15, 2017 February 28, 2017 $0.5350 $14.1 $0.4March 31, 2017 May 3, 2017 May 18, 2017 May 30, 2017 $0.5550 $14.6 $0.5June 30, 2017 August 2, 2017 August 15, 2017 August 29, 2017 $0.5700 $15.0 $0.7September 30, 2017 November 2, 2017 November 15, 2017 November 29, 2017 $0.6150 $16.2 $1.1December 31, 2017 January 31, 2018 February 15, 2018 February 28, 2018 $0.6200 $16.3 $1.1 For purposes of calculating the Partnership’s earnings per unit under the two-class method, common units are treatedas participating preferred units, and the subordinated units are treated as the residual equity interest, or common equity. IDRsare treated as participating securities.Distributions made in future periods based on the current period calculation of cash available for distribution areallocated to each class of equity that will receive the distribution. Any unpaid cumulative distributions are allocated to theappropriate class of equity.The Partnership determines the amount of cash available for distribution for each quarter in accordance with thePartnership Agreement. The amount to be distributed to common unitholders, subordinated unitholders and IDR holders isbased on the distribution waterfall set forth in the Partnership Agreement. Net earnings for the quarter are allocated to eachclass of partnership interest based on the distributions to be made. Additionally, if, during the subordination period, thePartnership does not have enough cash available to make the required minimum distribution to the common unitholders, thePartnership will allocate net earnings to the common unitholders based on the amount of distributions in arrears. When actualcash distributions are made based on distributions in arrears, those cash distributions will not be allocated to the commonunitholders, as such earnings were allocated in previous quarters.119 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Accumulated Other Comprehensive IncomeComprehensive income consists of two components, net income and other comprehensive income. Othercomprehensive income refers to revenue, expenses, and gains and losses that under GAAP are included in comprehensiveincome but excluded from net income. The Partnership’s other comprehensive income for 2017 and 2016 consists ofunrealized gains and losses related to derivative instruments accounted for as cash flow hedges. There was no othercomprehensive income for the year ended December 31, 2015.The following table presents the changes in accumulated other comprehensive income: Unrealized Losses on Derivative InstrumentsBalance at December 31, 2015 $ —Net unrealized losses (246)Reclassification of net losses realized into net income 841Accumulated other comprehensive income at December 31, 2016 595Net unrealized losses (5,463)Reclassification of net losses realized into net income 1,828Accumulated other comprehensive loss at December 31, 2017 $(3,040) Noncontrolling Interests—Enviva Pellets Wiggins, LLCPrior to December 28, 2017, the Partnership held a 67% controlling interest in Wiggins. In December 2016, thePartnership, with the authorization of the Partnership’s board of directors, initiated a plan, and entered into a purchase andsale agreement, to sell the Wiggins plant. At such time, the Partnership reclassified the Wiggins plant assets to current assetsheld for sale and ceased depreciation. On January 20, 2017, the purchase and sale agreement terminated when the buyerfailed to pay the purchase price.On December 27, 2017, the Partnership sold the Wiggins plant to a third-party buyer for a purchase price of $0.4million and recorded a loss on the sale of $0.8 million, net, which is included in general and administrative expenses. OnDecember 28, 2017, Wiggins was dissolved along with associated noncontrolling interests. Upon dissolution, no amountswere distributed to the non-controlling interest holders and all intercompany balances were forgiven (see Note 11, AssetsHeld for Sale).Noncontrolling Interests—First Hancock JVSampson and Wilmington were wholly owned subsidiaries of the First Hancock JV prior to the consummation of theSampson Drop-Down and the Wilmington Drop-Down. The Partnership’s financial statements have been recast to include thefinancial results of Sampson and Wilmington as if the consummation of the Sampson Drop-Down and Wilmington Drop-Down had occurred on May 15, 2013, the date Sampson and Wilmington were originally organized. The interests of the FirstHancock JV’s third-party investors in Sampson and Wilmington for periods prior to the related drop-down transactions havebeen reflected as a non-controlling interest in the Partnership’s financial statements. The Partnership’s consolidatedstatements of income for the years ended December 31, 2017, 2016, and 2015 include net losses of $0, $3.3 million and $1.9million, respectively, attributable to the non-controlling interests in Sampson. The Partnership’s consolidated statements ofoperations for the years ended December 31, 2017, 2016, and 2015 include net losses of $3.1 million, $2.2 million and $1.0million, respectively, attributable to the non-controlling interests in Wilmington.120 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (16) Equity-Based AwardsLong-Term Incentive PlanThe General Partner maintains the Enviva Partners, LP Long-Term Incentive Plan (“LTIP”) for employees,consultants and directors of the General Partner and any of its affiliates that perform services for the Partnership. The LTIPprovides for the grant, from time to time, at the discretion of the board of directors of the General Partner or a committeethereof, of unit options, unit appreciation rights, restricted units, phantom units, DERs unit awards, and other unit-basedawards. The LTIP limits the number of common units that may be delivered pursuant to awards under the plan to 2,738,182common units. Common units subject to awards that are forfeited, cancelled, exercised, paid, or otherwise terminate or expirewithout the actual delivery of common units will be available for delivery pursuant to other awards. The common units underthe LTIP will consist, in whole or in part, of common units acquired in the open market or from any affiliate or any otherperson, newly issued common units or any combination of the foregoing as determined by the board of directors of theGeneral Partner or a committee thereof.During 2017, 2016 and 2015, the board of directors of the General Partner granted phantom units in tandem withcorresponding DERs to employees of the Provider who provide services to the Partnership (the “Affiliate Grants”), andphantom units in tandem with corresponding DERs to certain non-employee directors of the General Partner (the “DirectorGrants”). The phantom units and corresponding DERs are subject to certain vesting and forfeiture provisions. Awardrecipients do not have all the rights of a unitholder with respect to the phantom units until the phantom units have vestedand been settled. Awards of the phantom units are settled in common units within 60 days after the applicable vesting date. Ifa phantom unit award recipient experiences a termination of service under certain circumstances set forth in the applicableaward agreement, the unvested phantom units and corresponding DERs are forfeited. Forfeitures are recognized when theactual forfeiture occurs.A summary of the Affiliate Grants for the years ended December 31, 2017, 2016 and 2015 is as follows: Performance-Based Total Affiliate Grant Phantom Units Phantom Units Phantom Units Weighted- Weighted- Weighted- Average Average Average Grant Date Grant Date Grant Date Fair Value Fair Value Fair Value Units (per unit)(1) Units (per unit)(1) Units (per unit)(1)Nonvested December 31, 2014 — $ — — $ — — $ —Granted 200,351 $20.62 81,803 $20.36 282,154 $20.54Forfeitures (12,230) $21.26 — $ — (12,230) $21.26Vested — $ — — $— — $ —Nonvested December 31, 2015 188,121 $20.58 81,803 $20.36 269,924 $20.51Granted 207,404 $18.32 174,045 $19.16 381,449 $18.71Forfeitures (49,372) $19.93 (20,493) $20.57 (69,865) $20.11Vested — $ — — $— — $ —Nonvested December 31, 2016 346,153 $19.32 235,355 $19.46 581,508 $19.37Granted 301,400 $25.67 111,104 $25.51 412,504 $25.63Forfeitures (51,687) $21.77 (95,545) $18.36 (147,232) $18.36Vested — $ — (139,810) $20.20 (139,810) $20.20Nonvested December 31, 2017 595,866 $22.32 111,104 $25.52 706,970 $22.82(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.Phantom units subject to the Affiliate Grants vest on the third anniversary of the grant date except for performance-based phantom units which vest on the achievement of specific performance milestones. The fair value of121 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) the Affiliate Grants granted during 2017 was $10.6 million based on the market price per unit on the applicable date of grant.These units are accounted for as if they are distributed by the Partnership. The fair value of the Affiliate Grants is remeasuredby the Provider at each reporting period until the award is settled. Compensation cost recorded each period will vary basedon the change in the award’s fair value. For awards with performance goals, the expense is accrued only if the performancegoals are considered to be probable of occurring. The Provider recognizes unit-based compensation expense for the unitsawarded and a portion of that expense is allocated to the Partnership. During the fourth quarter of 2017, $1.6 million of unit-based compensation was reversed as performance goals were not met. The Provider allocates unit-based compensationexpense to the Partnership in the same manner as other corporate expenses. The Partnership’s portion of the unit-basedcompensation expense is included in general and administrative expenses. The Partnership recognized $3.4 million, $3.1million and $0.4 million of general and administrative expense associated with the Affiliate Grants during the years endedDecember 31, 2017, 2016 and 2015, respectively.A summary of the Director Grant unit awards subject to vesting for the years ended December 31, 2017, 2016 and2015, is as follows: Performance-Based Total Director Grant Phantom Units Phantom Units Phantom Units Weighted- Weighted- Weighted- Average Average Average Grant Date Grant Date Grant Date Fair Value Fair Value Fair Value Units (per unit)(1) Units (per unit)(1) Units (per unit)(1)Nonvested December 31, 2014 — $ — — $ — — $ —Granted 14,112 $21.26 — $ — 14,112 $21.26Forfeitures — $ — — $ — — $ —Vested — $ — — $— — $ —Nonvested December 31, 2015 14,112 $21.26 — $ — 14,112 $21.26Granted 17,724 $22.57 — $ — 17,724 $22.57Forfeitures — $ — — $ — — $ —Vested (14,112) $21.26 — $— (14,112) $21.26Nonvested December 31, 2016 17,724 $22.57 — $ — 17,724 $22.57Granted 15,840 $25.25 — $ — 15,840 $25.25Forfeitures — $ — — $ — — $ —Vested (17,724) $22.57 — $ — (17,724) $22.57Nonvested December 31, 2017 15,840 $25.25 — $ — 15,840 $25.25(1)Determined by dividing the aggregate grant date fair value of awards by the number of awards issued.On February 3, 2017, Director Grants valued at $0.4 million were granted and vest on the first anniversary of thegrant date, February 3, 2018. On May 4, 2017, the Director Grants that were nonvested at December 31, 2016 vested andcommon units were issued. In addition, 3,724 common units were granted and issued to non-employee directors of theGeneral Partner as compensation for services performed on the General Partner’s board of directors during the year endedDecember 31, 2017. For the years ended December 31, 2017 and 2016 the Partnership recorded $0.5 million and $0.4million, respectively, of compensation expense with respect to the Director Grants. For the year ended December 31, 2015, aninsignificant amount of compensation expense with respect to the Director Grants was recorded.The DERs associated with the Affiliate Grants and the Director Grants subject to time-based vesting entitle therecipients to receive payments equal to any distributions made by the Partnership to the holders of common units within 60days 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 therelated performance-based phantom units. 122 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Unpaid DER amounts related to the performance-based Affiliate Grants at December 31, 2017 were $0.9 million.Unpaid DER amounts of $0.7 million are included in accrued liabilities and $0.2 million are included in other long-termliabilities on the consolidated balance sheets. Unpaid DER amounts related to the performance-based Affiliate Grants atDecember 31, 2016 were $0.6 million. Unpaid DER amounts of $0.4 million are included in accrued liabilities and $0.2million are included in other long-term liabilities on the consolidated balance sheets. DER distributions are paid by anaffiliate and were $1.0 million and $0.7 million for the years ended December 31, 2017 and 2016, respectively, and wereinsignificant for the year ended December 31, 2015. At December 31, 2017 and 2016, $0 and $0.4 million, respectively,of DER distributions are included in related-party accrued liabilities.(17) Net Income per Limited Partner UnitNet income per unit applicable to limited partners (including subordinated unitholders) is computed by dividinglimited partners’ interest in net income, after deducting any incentive distributions, by the weighted-average number ofoutstanding common and subordinated units. The Partnership’s net income is allocated to the limited partners in accordancewith their respective ownership percentages, after giving effect to priority income allocations for incentive distributions, ifany, to the holder of the IDRs, pursuant to the Partnership Agreement, which are declared and paid following the close ofeach quarter. Earnings in excess of distributions are allocated to the limited partners based on their respective ownershipinterests. Payments made to the Partnership’s unitholders are determined in relation to actual distributions declared and arenot based on the net income allocations used in the calculation of earnings per unit.In addition to the common and subordinated units, the Partnership has also identified the IDRs and phantom units asparticipating securities and uses the two-class method when calculating the net income per unit applicable to limitedpartners, which is based on the weighted-average number of common units and subordinated units outstanding during theperiod. Diluted net income per unit includes the effects of potentially dilutive time-based and performance-based phantomunits on the Partnership’s common units. Basic and diluted earnings per unit applicable to subordinated limited partners arethe same because there are no potentially dilutive subordinated units outstanding.123 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) The computation of net income (loss) per limited partner unit is a follows for the years ended December 31: 2016 2015 2017 (Recast) (Recast) Net income $14,373 $13,463 $17,563Less net loss attributable to noncontrolling partners’ interests 3,140 5,804 2,859Net income attributable to Enviva Partners, LP $17,513 $19,267 $20,422Less: Predecessor loss to May 4, 2015 (prior to IPO) $ — $ — (2,132)Less: Pre-acquisition income from April 10, 2015 to December 10, 2015 fromoperations of Enviva Pellets Southampton, LLC Drop-Down allocated to GeneralPartner — — 6,264Less: Pre-acquisition income from inception to December 13, 2016 fromoperations of Enviva Pellets Sampson, LLC Drop-Down allocated to GeneralPartner — (3,231) (1,815)Less: Pre-acquisition income from inception to October 1, 2017 from operations ofEnviva Port of Wilmington, LLC Drop-Down allocated to General Partner (3,049) (2,110) (937)Enviva Partners, LP limited partners’ interest in net income $20,562 $24,608 $19,042Less: Distributions declared on: Common units $34,033 $26,933 $14,282Subordinated units 28,096 24,167 13,846IDRs 3,398 1,077 —Total distributions declared 65,527 52,177 28,128Earnings less than distributions $(44,965) $(27,569) $(9,086) Basic and diluted net income per limited partner unit is follows: Year Ended December 31, 2017 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 14,403 11,905 —Effect of nonvested phantom units 948 — —Weighted-average common units outstanding—diluted 15,351 11,905 — Year Ended December 31, 2017 Common Subordinated General Units Units Partner Total Distributions declared $34,033 $28,096 $3,398 $65,527Earnings less than distributions (24,631) (20,334) — (44,965)Net income attributable to partners $9,402 $7,762 $3,398 $20,562Weighted-average units outstanding—basic 14,403 11,905 Weighted-average units outstanding—diluted 15,351 11,905 Net income per limited partner unit—basic $0.65 $0.65 — $1.30Net income per limited partner unit—diluted $0.61 $0.65 — $1.26 124 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) Year Ended December 31, 2016 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 13,002 11,905 —Effect of nonvested phantom units 557 — —Weighted-average common units outstanding—diluted 13,559 11,905 — Year Ended December 31, 2016 Common Subordinated General Units Units Partner Total Distributions declared $26,933 $24,167 $1,077 $52,177Earnings less than distributions (14,531) (13,038) — (27,569)Net income attributable to partners $12,402 $11,129 $1,077 $24,608Weighted-average units outstanding—basic 13,002 11,905 Weighted-average units outstanding—diluted 13,559 11,905 Net income per limited partner unit—basic $0.95 $0.93 $ — $1.88Net income per limited partner unit—diluted $0.91 $0.93 $ — $1.84 Year Ended December 31, 2015 Common Subordinated General Units Units Partner Weighted-average common units outstanding—basic 11,988 11,905 —Effect of nonvested phantom units 270 — —Weighted-average common units outstanding—diluted 12,258 11,905 — Year Ended December 31, 2015 Common Subordinated General Units Units Partner Total Distributions declared $14,282 $13,846 $ — $28,128Earnings less than distributions (4,721) (4,365) — (9,086)Net income attributable to partners $9,561 $9,481 $ — $19,042Weighted-average units outstanding—basic 11,988 11,905 Weighted-average units outstanding—diluted 12,258 11,905 Net income per limited partner unit—basic $0.80 $0.80 $ — $1.60Net income per limited partner unit—diluted $0.79 $0.79 $ — $1.58 125 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (18) Commitments and ContingenciesShipping EventDuring the fourth quarter of 2016, the Partnership re-purchased a shipment of wood pellets from one customer andsubsequently sold it to another customer in a back-to-back transaction. Smoldering was observed onboard the vessel carryingthe shipment, which resulted in damage to a portion of the shipment and one of the vessel’s five cargo holds (the “ShippingEvent”). The disponent owner of the vessel (the “Shipowner”) had directly or indirectly chartered the vessel from certainother parties (collectively, the “Head Owners”) and in turn contracted with Cottondale as the charterer of the vessel.Following the mutual appointment of arbitrators in connection with the Shipping Event, on June 8, 2017, the Shipownersubmitted claims against Cottondale (the “Claims”) alleging damages of approximately $11.8 million (calculated usingexchange rates as of December 31, 2017), together with other unquantified losses and damages. The Claims provide that theShipowner would seek indemnification and other damages from Cottondale to the extent that the Shipowner is unsuccessfulin its defense of claims raised by the Head Owners against it for damages arising in connection with the Shipping Event.Although it is reasonably possible that the Shipping Event may result in additional costs and liabilities for thePartnership’s account, responsibility for such costs and liabilities incurred in connection with the Shipping Event is disputedamong the various parties involved. If any such costs and liabilities ultimately are allocated to the Partnership, a portion maybe recovered under insurance. The Partnership believes it has meritorious defenses to the Claims, but is generally unable topredict the timing or outcome of any claims or proceedings, including the Claims, associated with the Shipping Event, or anyinsurance recoveries in respect thereof. Consequently, the Partnership is unable to provide an estimate of the amount or rangeof possible loss.Operating LeasesThe MSA fee charged by Enviva Holdings, LP to the Partnership includes rent related amounts for a noncancelableoperating lease for office space in Maryland and North Carolina held by Enviva Holdings, LP. Other rent expense wasinsignificant for the years ended December 31, 2017, 2016 and 2015.On February 20, 2015, the Wilmington terminal entered into a Deed of Lease Agreement (the “Lease”) with NorthCarolina State Ports Authority (“NCSPA”) to lease certain real property at NCSPA’s Wilmington, North Carolina marineterminal for the Wilmington terminal. The Lease has a twenty-one year term, with two five-year renewal options, with annualbase rent of $0.2 million which is payable monthly or annually, subject to an annual increase in the producer’s price indexfor industrial commodities less fuel. No payments are due until September 15, 2021. The total estimated base rent paymentsover the life of the lease are estimated at $4.7 million.On May 4, 2016, the Wilmington terminal and NCSPA entered into a second amendment to the Lease, whichincludes a minimum annual throughput ton fee, subject to an annual increase in producer’s price index up to 1%. The totalestimated minimum annual throughput ton fee is estimated at $1.9 million annually.Future minimum lease payments, excluding those charged under the MSA fee, for noncancelable operating leases(with initial or remaining lease terms in excess of one year) as of December 31, 2017 are as follows:2018 $3,7372019 2,8292020 2,7382021 2,7232022 2,535Thereafter 61,525Total future minimum lease payments $76,087126 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) CommitmentsThe Partnership has entered into throughput agreements, expiring between 2021 through 2023, to receive terminaland stevedoring services at the Partnership’s port facilities. The agreements specify a minimum cargo throughput requirementat a fixed price per ton or a fixed fee, subject to an adjustment based on the consumer price index or the producer pricesindex, for a defined period of time, ranging from monthly to annual basis. At December 31, 2017, the Partnership hadapproximately $35.3 million related to firm commitments under the terminal services and stevedoring agreements. For theyears ended December 31, 2017, 2016 and 2015, terminal services and stevedoring expenses were $10.6 million, $10.3million, and $7.1 million, respectively.The Partnership has entered into long-term arrangements to secure transportation from its plants to the port facilities.Under certain of these agreements, expiring between 2019 through 2023, the Partnership committed to various annualminimum volumes under multi‑year fixed‑cost contracts with third‑party logistics providers for trucking and railtransportation, subject to increases in the consumer price index and certain fuel price adjustments. For the years endedDecember 31, 2017, 2016 and 2015, transportation expenses were $23.8 million, $21.7 million and $20.9 million,respectively.The Partnership has entered into long-term supply arrangements, expiring between 2019 through 2021, to secure thesupply of wood pellets from third-party vendors. The minimum annual purchase volumes are at a fixed price per metric tonadjusted for volume, pellet quality and certain shipping-related charges. The supply agreement for the purchase of 720,000MT of wood pellets from British Columbia is fully offset by an agreement to sell 720,000 MT of wood pellets to the samecounterparty from the Partnership’s terminal locations. As of December 31, 2017 the Partnership purchased approximately$3.5 million under these long-term supply agreements. No amounts were incurred related to these agreements for the yearsended December 31, 2016 and 2015.Fixed and determinable portions of the minimum aggregate future payments under these firm terminal services,stevedoring, transportation, and supply agreements obligations for the next five years are as follows:2018 $25,2442019 27,2942020 56,3132021 93,0332022 6,674Thereafter 6,674Total $215,232 In order to mitigate volatility in the Partnership’s shipping costs, it has entered into fixed‑price shipping contractswith reputable shippers matching the terms and volumes of certain of the Partnership’s off‑take contracts for which thePartnership is responsible for arranging shipping. Contracts with shippers, expiring between 2019 through 2034, includeprovisions as to the minimum amount of metric tons per year to be shipped and may also stipulate the number of shipments.Pursuant to these contracts, the terms extend up to fifteen years, charges are based on a fixed‑price per metric ton and, in somecases, there are adjustment provisions for increases in the price of fuel or for other distribution‑related costs. The charge permetric ton varies depending on the loading port and the discharge port. For the years ended December 31, 2017, 2016 and2015, shipping expenses were approximately $52.2 million, $41.5 million, and $44.9 million, respectively, and wereincluded in cost of sales.127 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (19) Subsequent EventsLong-Term Incentive PlanOn January 31, 2018, 2018, the Board granted 13,964 Director Grants and 359,843 Affiliate Grants in tandem withcorresponding DERs. The Director Grants vest on the first anniversary of the grant date. Of the total Affiliate Grants, 243,442phantom units vest on the third anniversary of the grant date and 116,401 phantom units vest on the performance of specificmilestones. The fair value of the Director Grants and Affiliate Grants was $10.7 million based on the market price per unit onthe date of the grant.Greenwood ContractOn February 16, 2018, the Partnership entered into a contract with a wholly owned subsidiary of the SecondHancock JV to purchase wood pellets produced by the Greenwood plant (the “Greenwood Contract”). Pursuant to theGreenwood Contract, the Partnership has agreed, subject to certain conditions, to purchase all of the production from theGreenwood plant from the date of acquiring the Greenwood plant through March 2022 and has a take-or-pay obligation for550,000 MTPY (prorated for partial contract years) beginning in mid-2019.(20) Quarterly Financial Data (Unaudited)The following table presents the Partnership’s unaudited quarterly financial data. This information has beenprepared on a basis consistent with that of the Predecessor’s audited consolidated financial statements and all necessarymaterial adjustments, consisting of normal recurring accruals and adjustments, have been included to present fairly theunaudited quarterly financial data. As discussed in Note 1, Description of Business and Basis of Presentation, theconsolidated financial statements for the periods prior to the Wilmington Drop-Down have been retroactively recast. Thequarterly information presented below has also been recast accordingly. The quarterly results of operations for these periodsare not necessarily indicative of future results of operations. Basic and diluted earnings per unit are computed independentlyfor each of the quarters presented. Therefore, the sum of quarterly basic and diluted per unit information may not equalannual basic and diluted earnings per unit. First Second Third Fourth For the Year Ended December 31, 2017 Quarter Quarter Quarter Quarter Total (Recast) (Recast) (Recast) Net revenue $122,443 $127,547 $132,223 $161,008 $543,221Gross margin 16,368 16,331 20,382 25,721 78,802Net (loss) income (45) 1,497 5,023 7,898 14,373Enviva Partners, LP limited partners’ interest in netincome 2,535 3,862 6,339 7,826 20,562Basic income per limited partner common unit $0.08 $0.12 $0.20 $0.25 $0.65Diluted income per limited partner common unit $0.07 $0.11 $0.19 $0.24 $0.61Basic income per limited partner subordinated unit $0.08 $0.12 $0.20 $0.25 $0.65Diluted income per limited partner subordinated unit $0.08 $0.12 $0.20 $0.25 $0.65 128 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) First Second Third Fourth For the Year Ended December 31, 2016 Quarter Quarter Quarter Quarter Total (Recast) (Recast) (Recast) (Recast) (Recast)Net revenue $107,252 $119,709 $110,794 $126,521 $464,276Gross margin 15,754 19,457 22,417 19,144 76,772Net income (loss) 4,933 9,144 9,028 (9,642) 13,463Enviva Partners, LP limited partners’ interest innet income (loss) 7,494 12,053 13,033 (7,972) 24,608Basic income (loss) per limited partner commonunit $0.30 $0.48 $0.51 $(0.34) $0.95Diluted income (loss) per limited partnercommon unit $0.29 $0.47 $0.50 $(0.34) $0.91Basic income (loss) per limited partnersubordinated unit $0.30 $0.48 $0.51 $(0.32) $0.93Diluted income (loss) per limited partnersubordinated unit $0.29 $0.47 $0.50 $(0.32) $0.93129 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.ENVIVA PARTNERS, LP AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)(In thousands, except number of units, per unit amounts and unless otherwise noted) (21) Supplemental Guarantor Information The Partnership and its wholly owned finance subsidiary, Enviva Partners Finance Corp., are the co-issuers of theSenior Notes on a joint and several basis. The Partnership has no material independent assets or operations. The Senior Notesare guaranteed on a senior unsecured basis by certain of the Partnership’s direct and indirect wholly owned subsidiaries(excluding Enviva Partners Finance Corp. and certain recently formed immaterial subsidiaries) and will be guaranteed by thePartnership’s future restricted subsidiaries that guarantee certain of its other indebtedness (collectively, the “SubsidiaryGuarantors”). The guarantees are full and unconditional and joint and several. Each of the Subsidiary Guarantors is directlyor indirectly 100% owned by the Partnership. Enviva Partners Finance Corp. is a finance subsidiary formed for the purpose ofbeing the co-issuer of the Senior Notes. Other than certain restrictions arising under the Credit Agreement and the Indenture(see Note 12, Long-Term Debt and Capital Lease Obligations), there are no significant restrictions on the ability of anyrestricted subsidiary to (i) pay dividends or make any other distributions to the Partnership or any of its restricted subsidiariesor (ii) make loans or advances to the Partnership or any of its restricted subsidiaries. 130 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURENone. ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and ProceduresAn evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as definedin Rules 13(a)‑15(e) and 15(d)‑15(e) under the Exchange Act) was carried out under the supervision and with theparticipation of management, including the Chief Executive Officer and Chief Financial Officer of our General Partner. Ourdisclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosedby us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management,including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regardingrequired disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules andforms of the SEC. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer of our General Partnerconcluded that the design and operation of our disclosure controls and procedures were effective as of December 31, 2017,the end of the period covered by this Annual Report.Internal Control over Financial ReportingManagement’s Annual Report on Internal Control over Financial ReportingThe management of our General Partner is responsible for establishing and maintaining adequate internal controlover financial reporting for us as defined in Rules 13a‑15(f) and 15d‑15(f) of the Exchange Act. Under the supervision of, andwith the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we conductedan evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteriaestablished in Internal Control—Integrated Framework in 2013, issued by the Committee of Sponsoring Organizations ofthe Treadway Commission. Based on this evaluation, management of our General Partner concluded that our internal controlover financial reporting was effective as of December 31, 2017. This Annual Report on Form 10‑K does not include anattestation report of our independent registered public accounting firm due to a transition period established by rules of theSEC for emerging growth companies.Inherent Limitations on Effectiveness of ControlsControl systems, no matter how well conceived and operated, are designed to provide a reasonable, but not anabsolute, level of assurance that the objectives of the control system are met. Further, the design of a control system mustreflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that allcontrol issues and instances of fraud, if any, have been detected. Because of the inherent limitations in any control system,misstatements due to error or fraud may occur and not be detected.Changes in Internal Control over Financial ReportingThere were no changes in our internal control over financial reporting (as defined in Rules 13a‑15(e) and 15d‑15(e)under the Exchange Act) that occurred during the three months ended December 31, 2017 that have materially affected, orare reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATIONNot applicable.131 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEWe are managed and operated by the board of directors and executive officers of our General Partner. Ourunitholders are not entitled to elect our General Partner or its directors or otherwise directly participate in our management oroperations. Our General Partner owes certain contractual duties to our unitholders as well as a fiduciary duty to its owners.As a result of owning our General Partner, our sponsor has the right to appoint all members of the board of directorsof our General Partner. In evaluating director candidates, our sponsor will assess whether a candidate possesses the integrity,judgment, knowledge, experience, skill and expertise that are likely to enhance the board’s ability to manage and direct ouraffairs and business, including, when applicable, to enhance the ability of committees of the board to fulfill their duties.The board of directors of our General Partner has ten directors, including four directors meeting the independencestandards established by the NYSE and the Exchange Act. The board of directors met eight times during 2017.All of the executive officers of our General Partner listed below allocate their time between managing the businessand affairs of us and our sponsor. The amount of time that our executive officers devote to our business and the business ofour sponsor varies in any given year based on a variety of factors. Our executive officers devote as much time to themanagement of our business as is necessary for the proper conduct of our business and affairs. However, our executiveofficers’ fiduciary duties to our sponsor and other obligations may prevent them from devoting sufficient time to our businessand affairs.We incur general and administrative costs related to our MSA with Enviva Management that cover the corporatesalary and overhead expenses associated with our business. If the MSA were terminated without replacement, or our GeneralPartner or its affiliates provided services outside of the scope of the MSA, our partnership agreement would require us toreimburse our General Partner and its affiliates, including our sponsor, for all expenses incurred and payments made on ourbehalf.Executive Officers and Directors of Our General PartnerThe following table shows information for the executive officers and directors of our General Partner. As the ownerof our General Partner, our sponsor appoints all members of the board of directors of our General Partner. Directors hold officeuntil their successors have been appointed or qualified or until the earlier of their death, resignation, removal ordisqualification. Executive officers are appointed by and serve at the discretion of the board. There are no familyrelationships among any of our directors or executive officers. One of our directors and all of our executive officers also serveas executive officers of our sponsor.132 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents Name of Beneficial Owner Age Position With Our General PartnerJohn K. Keppler 47 Chairman,President andChiefExecutiveOfficer Stephen F. Reeves 58 ExecutiveVicePresident andChiefFinancialOfficer Thomas Meth 45 ExecutiveVicePresident,Sales andMarketing William H. Schmidt, Jr. 45 ExecutiveVicePresident,CorporateDevelopmentand GeneralCounsel E. Royal Smith 45 ExecutiveVicePresident,Operations James P. Geraghty 40 VicePresident andController Raymond J. Kaszuba, III 39 VicePresident andTreasurer Ralph Alexander 62 Director John C. Bumgarner, Jr. 75 Director Robin J. A. Duggan 51 Director Michael B. Hoffman 67 Director Christopher B. Hunt 54 Director William K. Reilly 78 Director Gary L. Whitlock 68 Director Carl L. Williams 41 Director Janet S. Wong 59 Director John K. Keppler. Mr. Keppler has served as Chairman of the board of directors and President and Chief ExecutiveOfficer of our General Partner since our inception in November 2013. Mr. Keppler co‑founded Intrinergy, the predecessor toour sponsor, in 2004, and has been responsible for setting Enviva’s strategic direction and leading the company’s growth.From 2002 to 2004, Mr. Keppler was the Director of Corporate Strategy in the Office of the Vice Chairman with AmericaOnline and, prior to that, he was Senior Manager, Business Affairs and Development with America Online from 2001 to 2002.Mr. Keppler holds a B.A. in political economy from the University of California, Berkeley, as well as an MBA from TheDarden Graduate School of Business Administration at The University of Virginia. Over the course of Mr. Keppler’s career, hehas gained extensive experience growing innovative ideas into successful businesses across a broad range of industries andhas developed a wealth of experience in business strategy and operations and a keen knowledge of the renewable energysector. For the past ten years, Mr. Keppler has been responsible for setting our strategic direction and leading the company’sgrowth from a start‑up company to the world’s leading producer of wood biomass fuels. In light of this experience, we believethat he has the requisite set of skills to serve as a director, as well as Chairman, President and Chief Executive Officer.Stephen F. Reeves. Mr. Reeves has served as Executive Vice President and Chief Financial Officer of our GeneralPartner since our inception in November 2013. Mr. Reeves has served in the same capacity at our sponsor and Enviva, LPsince 2012. He served as Senior Vice President and Chief Financial Officer of The Black & Decker Corporation, a globalmanufacturer and marketer of power tools, home improvement products and industrial fastening equipment, from 2008through 2010, and prior to that served in the Worldwide Power Tools and Accessories division of Black and Decker as VicePresident—Global Finance from April 2000. Mr. Reeves was previously with the audit firm of Ernst & Young LLP.Mr. Reeves earned a B.S. in Accounting from the Pennsylvania State University.Thomas Meth. Mr. Meth has served as Executive Vice President, Sales and Marketing of our General Partner sinceour inception in November 2013. He was also a co‑founder of Intrinergy. Mr. Meth is responsible for our commercialcustomer relations as well as our marketing, sustainability, communications and public relations initiatives. Prior toIntrinergy, Mr. Meth was Head of Sales and Marketing in Europe, the Middle East and Africa for the Colfax Corporation fromSource: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.2002 to 2004. From 1993 to 2000, Mr. Meth was the Director of Sales for Europay Austria, a consumer financial servicescompany that offered MasterCard, Maestro and Electronic Purse services. Mr. Meth holds a bachelor of commerce fromVienna University of Economics and Business Administration in Austria as well as an MBA from The Darden GraduateSchool of Business Administration at The University of Virginia. Mr. Meth was an executive officer of IntrinergyDeutschland Management GmbH (“IDM”) and Enviva Pellets GmbH and Co. KG (“EPD”), which were engaged in pelletmanufacturing in Germany unrelated to our core business. Both entities filed for insolvency in Amtsgerichts Straubing, adistrict court located in Germany, in November 2010. Our predecessor distributed its indirect interests in IDM and EPD to oursponsor as part of the Reorganization.133 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsWilliam H. Schmidt, Jr. Mr. Schmidt has served as Executive Vice President, Corporate Development and GeneralCounsel of our General Partner since February 2018 and prior to that as Executive Vice President, General Counsel andSecretary since our inception in November 2013. He has served in the same capacity at our sponsor and Enviva, LP sinceMarch 2013. Mr. Schmidt is responsible for our and our sponsor’s legal affairs and, as President of Enviva DevelopmentHoldings, LLC, for our sponsor’s corporate development activities. Prior to joining us, Mr. Schmidt was the Senior VicePresident and General Counsel of Buckeye GP LLC, the general partner of Buckeye Partners, L.P., a master limitedpartnership that owned and operated petroleum pipelines and terminals in the United States, marine terminals servinginternational petroleum markets, natural gas storage facilities, and a petroleum products marketing business. From November2010 to February 2013, he was Vice President and General Counsel of Buckeye GP LLC and, from November 2007 toNovember 2010, he was Vice President, General Counsel and Secretary of Buckeye GP LLC. Prior to November 2007,Mr. Schmidt served as Vice President and General Counsel of Buckeye Pipe Line Services Company, an affiliate of BuckeyePartners, L.P., since February 2007 and as Associate General Counsel since September 2004. Mr. Schmidt also was thePresident of Lodi Gas Storage, L.L.C., a subsidiary of Buckeye Partners, L.P., from August 2009 to January 2012. Prior tojoining Buckeye, Mr. Schmidt practiced law at Chadbourne & Parke LLP, an international law firm.E. Royal Smith. Mr. Smith has served as Executive Vice President, Operations of our General Partner, Enviva, LPand our sponsor since August 2016 and prior to that as Vice President, Operations since April 2014. Prior to joiningEnviva, LP, he served as Director of Operations, NAA Division of Guilford Performance Textiles, a global textilemanufacturing company, from March 2012 to July 2014. From August 2010 to March 2012, Mr. Smith also served asDirector of Quality, NAA Division. Prior to joining Guilford, Mr. Smith worked as a Plant Manager at Pactiv, a foodpackaging manufacturer, from May 2009 to August 2010. Mr. Smith served as General Manager of a facility operated byUnited Plastics Group International from December 2005 to May 2009, after serving in other roles at the company from April2002. From January 1999 to September 1999, he served as Production Supervisor of The General Motors Corporation, beforeserving as Mechanical Device/Tool and Die Supervisor from September 1999 to August 2000. Mr. Smith holds a B.S. inMechanical Engineering from GMI Engineering and Management Institute.James P. Geraghty. Mr. Geraghty has served as Vice President and Controller of our General Partner since ourinception in November 2013, and has served in the same capacity at our sponsor and Enviva, LP since January 2011. FromJuly 2008 to January 2011, Mr. Geraghty was Project Manager at Rose Financial Services, a consulting firm that specializesin assisting early stage high‑growth companies to scale their finance functions in preparation for private and public debt andequity offerings. Prior to that, he was the Controller at The George Washington University Hospital since July 2002. FromSeptember 1999 to July 2002, Mr. Geraghty worked in the Assurance and Business Advisory Services of ArthurAndersen, LLP. Mr. Geraghty holds a B.S. in Accounting from Mount Saint Mary’s University, an MBA from the GeorgeWashington University School of Business and holds a Certified Public Accountant accreditation.Raymond J. Kaszuba, III. Mr. Kaszuba has served as Vice President and Treasurer of our General Partner andEnviva, LP since July 2015. Prior to joining Enviva, LP, he worked in several Treasury and finance‑related positions atExxon Mobil Corporation, a leading oil and natural gas company, for 8 years. Mr. Kaszuba holds a B.S. in Finance andEconomics from the University of Dayton and an MBA from the Tepper School of Business at Carnegie Mellon University.Michael B. Hoffman. Mr. Hoffman has served as a director on the board of directors of our General Partner since ourinception in November 2013. Mr. Hoffman is a partner of Riverstone, where he is principally responsible for investments inpower and renewable energy for Riverstone’s funds. Mr. Hoffman is co‑head of Riverstone’s Renewable Energy Funds I andII. Before joining Riverstone in 2003, Mr. Hoffman was senior managing director and head of the mergers and acquisitionsadvisory business of The Blackstone Group for 15 years, where he also served on the firm’s principal group investmentcommittee as well as its executive committee. Prior to joining Blackstone, Mr. Hoffman was managing director and co‑headof the mergers and acquisitions department of Smith Barney, Harris Upham & Co. In addition to serving on the boards of anumber of Riverstone portfolio companies and their affiliates, Mr. Hoffman is chairman of the board of directors of OnconovaTherapeutics Inc. He is also a member of the board of trustees of The Rockefeller University. We believe Mr. Hoffman’sextensive leadership and financial expertise enable him to contribute significant managerial, strategic and financialoversight skills to the board of directors of our General Partner and our management team.134 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRalph Alexander. Mr. Alexander has served as director on the board of directors of our General Partner since ourinception in November 2013. Mr. Alexander has served as the President and CEO of Talen Energy since December 2016. Hebecame affiliated with Riverstone Holdings LLC in September 2007. For nearly 25 years, Mr. Alexander served in variouspositions with subsidiaries and affiliates of BP plc, one of the world’s largest oil and gas companies. From June 2004 untilDecember 2006, he served as Chief Executive Officer of Innovene, BP’s $20 billion olefins and derivatives subsidiary. From2001 until June 2004, he served as Chief Executive Officer of BP’s Gas, Power and Renewables and Solar segment and was amember of the BP group executive committee. Prior to that, Mr. Alexander served as a Group Vice President in BP’sExploration and Production segment and BP’s Refinery and Marketing segment. He held responsibilities for various regionsof the world, including North America, Russia, the Caspian, Africa, and Latin America. Prior to these positions,Mr. Alexander held various positions in the upstream, downstream and finance groups of BP. Mr. Alexander currently serveson the board of Talen Energy Corporation since June 2015. From December 2014 through December 2016, Mr. Alexanderserved on the board of EP Energy Corporation. He has previously served on the boards of Foster Wheeler, Stein Mart, Inc.,Amyris and Anglo‑American plc. Mr. Alexander holds an M.S. in Nuclear Engineering from Brooklyn Polytech (now NYUSchool of Engineering—Polytechnic) and an M.S. in Management Science from Stanford University.Carl L. Williams. Mr. Williams has served as a director on the board of directors of our General Partner since ourinception in November 2013. Mr. Williams is a Managing Director at Riverstone. He also serves on the boards of a number ofRiverstone portfolio companies and their affiliates. Prior to joining Riverstone in 2008, Mr. Williams was in the GlobalNatural Resources investment banking group at Goldman, Sachs & Co. from 2005 to 2008. While at Goldman, he focused onmergers and acquisitions and financing transactions in the power generation, alternative energy, oil and gas and refiningindustries. Prior to that, he held various positions in engineering and strategic sourcing with Lyondell Chemical Company, asupplier of raw materials and technology to the coatings industry, from 1999 to 2004. He received his MBA from ColumbiaBusiness School, and holds a B.S. in chemical engineering and a B.A. in economics and managerial studies from RiceUniversity. We believe that Mr. Williams’ extensive experience in, and knowledge of, each of the finance and energy sectorsenable him to provide essential guidance to the board of directors of our General Partner and our management team.Robin J. A. Duggan. Mr. Duggan has served as a director on the board of directors of our General Partner since ourinception in November 2013. Mr. Duggan has been a Managing Director of Riverstone since 2014, and previously served asa Principal of Riverstone for seven years. Prior to joining Riverstone, Mr. Duggan was the founder of CommodityOptimization Ventures Ltd., a business that provided advice to clients in the private equity industry, including Texas PacificGroup. Before founding his business, he served for over 17 years in various positions with subsidiaries and affiliates ofBP plc. From 2004 to 2005, Mr. Duggan was the Vice President of European Business Optimization at Innovene, BP’s olefinsand derivatives subsidiary, where he was responsible for commercial activity for olefins and refining in Europe and alsooversaw Innovene’s successful separation from BP in Europe. From 1999 to 2003, Mr. Duggan held a number of senior levelpositions in BP’s Petrochemicals segment, including serving as the Performance Unit Leader of the Aromatics and Olefinsdivision, Global Business Manager of the Styrene business unit, and the Planning, Performance and Strategy Manager of theAcetyls business unit. Prior to that time, Mr. Duggan held various positions in BP’s Upstream segment in the UnitedKingdom, Australia and Venezuela over a period of ten years. Mr. Duggan serves on the boards of a number of Riverstoneportfolio companies and their affiliates. He holds a B.A in biochemistry from Oxford University and an M.S. in managementscience from Stanford University. Based upon his strong background in various aspects of the energy industry, we believeMr. Duggan has the requisite set of skills to serve as a director.John C. Bumgarner, Jr. Mr. Bumgarner has served as a director on the board of directors of our General Partner sinceApril 2015. Mr. Bumgarner has been engaged in private investment since November 2002, and currently assists in operatinga family‑owned, multi‑faceted real estate company. Mr. Bumgarner previously served as Co‑Chief Operating Officer andPresident of Strategic Investments for Williams Communications Group, Inc., a high technology company, from May 2001 toNovember 2002. Williams Communications Group, Inc. filed a Plan of Reorganization with the U.S. Bankruptcy Court inAugust 2002. Mr. Bumgarner joined The Williams Companies, Inc., in 1977 and, prior to working at WilliamsCommunications Group, Inc., served as Senior Vice President of Williams Companies Corporate Development and Planning,President of Williams International Company and President of Williams Real Estate Company. He most recently served as adirector of Energy Partners, Ltd., an oil and natural gas exploration and production company, from January 2000 to February2009, and at Market Planning Solutions Inc. from February 1982 until April 2011. Energy Partners, Ltd. filed a Plan ofReorganization with the U. S. Bankruptcy Court in May 2009.135 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsMr. Bumgarner holds a B.S. from the University of Kansas and an M.B.A. from Stanford University. Mr. Bumgarner’ssubstantial experience as an executive at a conglomerate and as a director on boards of public and private companiesengaged in a variety of industries provide him with unique insight that is particularly helpful and valuable to the board ofdirectors of our General Partner.William K. Reilly. Mr. Reilly has served as a director on the board of directors of our General Partner since April2015. Mr. Reilly served as Administrator of the U.S. Environmental Protection Agency from 1989 to 1993. From October1997 to December 2009, Mr. Reilly served as President and Chief Executive Officer of Aqua International Partners, aninvestment group which finances water improvements in emerging markets. He also served as Senior Advisor to TPG Capitalfrom September 1994 to December 2016. In 2010, Mr. Reilly was appointed by President Obama as co‑chair of the NationalCommission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. He currently serves on the board of directors ofRoyal Caribbean Cruises Ltd. Mr. Reilly served as a director of Conoco Inc. from 1998 until its merger with PhillipsPetroleum Company in 2002, and thereafter served as a director of ConocoPhillips until May 2013. From 1993 until April2012, Mr. Reilly also served on the board of directors of E.I. duPont de Nemours and Company. He has also previouslyserved as the first Payne Visiting Professor at Stanford University, President of the World Wildlife Fund and President of TheConservation Foundation. He is Chairman Emeritus of the World Wildlife Fund and Chairman of the Nicholas Institute forEnvironmental Policy Solutions at Duke University. Mr. Reilly’s extensive environmental regulatory experience and hisservice on various other boards make him well qualified to serve as a member of the board of directors of our General Partner,and allow him to provide unique and valuable perspective on matters critical to our operations.Janet S. Wong. Ms. Wong has served as a director on the board of directors of our General Partner since April 2015.Since January 2013, Ms. Wong has served as an Executive Advisor for Ascend, a non‑profit professional organization thatenables its members, corporate partners and the community to realize the leadership potential of Pan‑Asians in globalcorporations. At Ascend, Ms. Wong has been a co‑developer and instructor for its Executive Insight courses. In 2015,Ms. Wong was elected to serve on the Audit Committee for the American Heart Association as well as the Budget ReviewSubcommittee. In addition, she serves on the Louisiana Tech University Foundation Board and the College of BusinessAdvisory Board where she is the immediate past-Chairman. Ms. Wong served as a Partner at Grant Thornton LLP from August2008 through July 2012, where she was the Central Region Corporate and Partnership Services Lead Partner. In 2008,Ms. Wong retired from the partnership of KPMG, culminating a career with the global firm from 1985 through 2008, whereshe served as a National Industry Practice Lead Partner. Ms. Wong has extensive experience working with clients in theconsumer markets, energy, financial services, manufacturing, and technology sectors. She is a Certified Public Accountant.She holds a Master of Professional Accountancy from Louisiana Tech University and a Master of Taxation from Golden GateUniversity. We believe Ms. Wong’s audit expertise and her professional and leadership experience enable her to provideessential guidance to the board of directors of our General Partner and our management team.Christopher B. Hunt. Mr. Hunt has served as a director on the board of directors of our General Partner since April2016. Mr. Hunt is a managing director of Riverstone and joined Riverstone in 2008. In addition to serving on the boards of anumber of Riverstone portfolio companies and their affiliates, he also currently serves on the board of directors of NTR Plc.Prior to joining Riverstone, Mr. Hunt ran international power development and generation businesses for BP plc and EnronCorporation. Mr. Hunt received his BA from Wesleyan University and his MBA from Columbia University. He has alsocompleted various post‑graduate programs at Harvard University, Stanford University, the Massachusetts Institute ofTechnology and Oxford University. Mr. Hunt brings extensive experience in the renewable energy, conventional power andnatural gas industries to the board of directors of our General Partner.Gary L. Whitlock. Mr. Whitlock has served as a director on the board of directors of our General Partner since April2016. Mr. Whitlock served as Executive Vice President and Chief Financial Officer of CenterPoint Energy, Inc.(“CenterPoint”) from September 2002 until April 2015. From April 2015 until his retirement on October 1, 2015, he served asSpecial Advisor to the Chief Executive Officer of CenterPoint. While at CenterPoint, Mr. Whitlock was responsible foraccounting, treasury, risk management, tax, strategic planning, business development, emerging businesses and investorrelations. From July 2001 to September 2002, Mr. Whitlock served as Executive Vice President and Chief Financial Officerof the Delivery Group of Reliant Energy, Incorporated (“Reliant”). Prior to joining Reliant, Mr. Whitlock served as VicePresident of Finance and Chief Financial Officer of Dow AgroSciences LLC, a subsidiary of The Dow Chemical Company(“Dow”), from 1998 to 2001. He began his career with Dow in 1972, where he held a number of financial leadershippositions, both in the United States and globally. While at Dow, Mr. Whitlock served on136 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsthe boards of directors of various Dow entities. Mr. Whitlock is a Certified Public Accountant and received a BBA inaccounting from Sam Houston State University in 1972. He has previously served on the board of directors of Texas GencoHoldings, Inc., the board of directors of the general partner of Enable Midstream Partners, LP from March 2013 to August2015, the board of directors of KiOR, Inc. from December 2010 to June 2015, the board of directors of CHI St. Luke’s HealthSystem, The Woodlands, and the Leadership Cabinet of Texas Children’s Hospital. Mr. Whitlock brings extensiveexperience in public company financial management and reporting to the board of directors of our General Partner.Director IndependenceThe board of directors of our General Partner has four independent directors: John C. Bumgarner, Jr., William K.Reilly, Gary L. Whitlock and Janet S. Wong. The NYSE does not require a publicly traded partnership such as ours to have amajority of independent directors on the board or to establish a compensation committee or a nominating committee.However, our General Partner is required to have an audit committee of at least three members, and all its members arerequired to meet the independence and experience standards established by the NYSE and the Exchange Act.Committees of the Board of DirectorsThe board of directors of our General Partner has three standing committees: an audit committee, a compensationcommittee and a health, safety, sustainability and environmental committee. The board of directors of our General Partnermay also form a conflicts committee from time to time. Due to the related‑party nature of the Sampson Drop‑Down, the boardof directors of our General Partner formed a conflicts committee comprised solely of independent directors to evaluate theSampson Drop‑Down.Audit CommitteeWe are required to have an audit committee of at least three members, and all the members of the audit committeeare required to meet the independence and experience standards established by the NYSE and the Exchange Act.Mr. Bumgarner, Ms. Wong and Mr. Whitlock currently serve as members of the audit committee. The board determined thatall members of the audit committee are financially literate and are “independent” under the standards of the NYSE and SECregulations currently in effect. SEC rules also require that a public company disclose whether or not its audit committee hasan “audit committee financial expert” as a member. An “audit committee financial expert” is defined as a person who, basedon his or her experience, possesses the attributes defined by Regulation S‑K Item 407(d)(s)(ii). The board of directors of ourGeneral Partner believes Ms. Wong satisfies the definition of “audit committee financial expert.”The audit committee assists the board of directors in its oversight of the integrity of our financial statements and ourcompliance with legal and regulatory requirements and partnership policies and controls. The audit committee has the soleauthority to (1) retain and terminate our independent registered public accounting firm, (2) approve all auditing services andrelated fees and the terms thereof performed by our independent registered public accounting firm, and (3) pre‑approve anynon‑audit services and tax services to be rendered by our independent registered public accounting firm. The auditcommittee is also responsible for confirming the independence and objectivity of our independent registered publicaccounting firm. Our independent registered public accounting firm has been given unrestricted access to the auditcommittee and our management.Conflicts CommitteeOur General Partner’s board of directors may, from time to time, establish a conflicts committee to which the boardwill appoint at least one director and which may be asked to review specific matters that the board believes may involveconflicts of interest and determines to submit to the conflicts committee for review. The conflicts committee determines if theresolution of the conflict of interest is adverse to the interest of the partnership. The members of the conflicts committee maynot be officers or employees of our General Partner or directors, officers or employees of its affiliates, including our sponsor,and must meet the independence standards established by the NYSE and the Exchange Act to serve on an audit committee ofa board of directors, along with other requirements in our partnership agreement.137 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsAny matters approved by the conflicts committee will be conclusively deemed to be approved by us and all of our partnersand not a breach by our General Partner of any duties it may owe us or our unitholders. Due to the related‑party nature of theWilmington Drop‑Down, the board of directors of our General Partner formed a conflicts committee comprised ofMr. Bumgarner, Mr. Whitlock and Ms. Wong to evaluate the Wilmington Drop‑Down.Compensation CommitteeAs a limited partnership listed on the NYSE, we are not required to have a compensation committee. However, inconnection with our IPO, the board of directors of our General Partner established a compensation committee consisting ofMr. Alexander, Mr. Bumgarner and Mr. Hoffman to, among other things, administer our long‑term incentive plan andestablish and review general policies related to, and determine and approve, or make recommendations to the board withrespect to, the compensation and benefits of the non‑employee members of the board.Health, Safety, Sustainability and Environmental CommitteeIn connection with our IPO, the board of directors of our General Partner formed a Health, Safety, Sustainability andEnvironmental Committee (the “HSSE committee”) consisting of Mr. Duggan and Mr. Reilly. The HSSE committee assiststhe board of directors of our General Partner in fulfilling its oversight responsibilities with respect to the board’s and ourcontinuing commitment to (i) ensuring the safety of our employees and the public and assuring that our businesses andfacilities are operated and maintained in a safe and environmentally sound manner, (ii) sustainability, including sustainableforestry practices, (iii) delivering environmental benefits to our customers, the forests from which we source our wood fiberand the communities in which we operate and (iv) minimizing the impact of our operations on the environment. The HSSEcommittee reviews and oversees our health, safety, sustainability and environmental policies, programs, issues andinitiatives, reviews associated risks that affect or could affect us, our employees and the public and ensures propermanagement of those risks and reports to the board on health, safety, sustainability and environmental matters affecting us,our employees and the public. The members of the HSSE committee are non‑employee directors of our General Partner.Executive Sessions of Non‑Management DirectorsThe board of directors of our General Partner holds regular executive sessions in which the non‑managementdirectors meet without any members of management present. The purpose of these executive sessions is to promote open andcandid discussion among the non‑management directors. In the event that the non‑management directors include directorswho are not independent under the listing requirements of the NYSE, then at least once a year, there will be an executivesession including only independent directors. The director who presides at these meetings is John C. Bumgarner, Jr.Unitholders and any other interested parties may also communicate directly with the presiding director or with thenon‑management directors as a group, by mail addressed to:Presiding Director c/o General CounselEnviva Partners, LP7200 Wisconsin Avenue, Suite 1000Bethesda, Maryland 20814Communication with the Board of DirectorsAs set forth in the Communications Policy adopted by the board of directors of our General Partner, a holder of ourunits or other interested party who wishes to communicate with any director of our General Partner may do so by sendingcommunications to the board, any committee of the board, the Chairman of the board or any other director to:General CounselEnviva Partners, LP7200 Wisconsin Avenue, Suite 1000Bethesda, Maryland 20814138 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsand marking the envelope containing each communication as “Unitholder Communication with Directors” and clearlyidentifying the intended recipient(s) of the communication. Communications will be relayed to the intended recipient of theboard of directors of our General Partner pursuant to the Communications Policy, which is available on the “InvestorsRelations” section of our website at http://www.envivabiomass.com. Any communications withheld under theCommunications Policy will nonetheless be recorded and available for any director who wishes to review them.Corporate GovernanceOur General Partner has adopted a Code of Business Conduct and Ethics that applies to our General Partner’sdirectors, officers and employees, as well as to employees of our subsidiaries or affiliates that perform work for us. The Codeof Business Conduct and Ethics also serves as the financial code of ethics for our Chief Executive Officer, Chief FinancialOfficer, controller and other senior financial officers. Our General Partner has also adopted Corporate Governance Guidelinesthat outline the important policies and practices regarding our governance.We make available free of charge, within the “Investors Relations” section of our website athttp://www.envivabiomass.com and in print to any interested party who so requests, our Code of Business Conduct andEthics, Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee Charter and HSSECommittee Charter. Requests for print copies may be directed to Investor Relations, Enviva Partners, LP, 7200 WisconsinAve., Suite 1000, Bethesda, Maryland 20814, or by telephone at (301) 657‑5560. We will post on our website all waivers toor amendments of the Code of Business Conduct and Ethics, which are required to be disclosed by applicable law and thelisting requirements of the NYSE. The information contained on, or connected to, our website is not incorporated byreference into this Annual Report on Form 10‑K and should not be considered part of this or any other report we file with orfurnish to the SEC.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Exchange Act requires that the directors and executive officers of our General Partner and allpersons who beneficially own more than 10% of our common units file initial reports of ownership and reports of changes inownership of our common units with the SEC. As a practical matter, we assist the directors and executive officers of ourGeneral Partner by monitoring transactions and completing and filing Section 16 reports on their behalf.Based solely upon our review of copies of filings or written representations from the reporting persons, we believethat, for the year ended December 31, 2017, Mr. Gary Whitlock, a member of the board of directors of our General Partner,failed to file, on a timely basis, one report on Form 4 required to be filed under Section 16(a) of the Exchange Act withrespect to one transaction. On August 2, 2017, Mr. Whitlock was issued 505 common units in connection with his annualcompensation. The Form 4 required to be filed by Mr. Whitlock in connection with this issuance was filed on October 27,2017. ITEM 11. EXECUTIVE COMPENSATION Neither we nor our General Partner have any employees. All of our executive officers are currently employed byEnviva Management.We are providing compensation disclosure that satisfies the requirements applicable to emerging growth companies.For 2017, we determined our named executive officers (“Named Executive Officers” or “NEOs”) to be:·John K. Keppler, Chairman of the Board of Directors, President and Chief Executive Officer,·E. Royal Smith, Executive Vice President, Operations, and·Stephen F. Reeves, Executive Vice President and Chief Financial Officer.The executive officers of our General Partner split their time between managing our business and the otherbusinesses of our sponsor that are unrelated to us. Except with respect to awards that may be granted under the LTIP, allresponsibility and authority for compensation‑related decisions for the NEOs remains with Enviva Management and its139 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsaffiliates, and such decisions are not subject to any approval by us, our General Partner’s board of directors or any committeesthereof. Other than awards that may be granted under the LTIP, Enviva Management and its affiliates have the ultimatedecision‑making authority with respect to the total compensation of our executive officers and employees.The compensation disclosed below with respect to the NEOs reflects only the portion of compensation expense thatis allocated to us pursuant to the MSA among us, our General Partner and Enviva Management. For more information aboutthe MSA, please read Item 13. “Certain Relationships and Related Transactions, and Director Independence—OtherTransactions with Related Persons—Management Services Agreement.”The disclosures below relating to cash compensation paid by Enviva Management are based on informationprovided to us by Enviva Management. With the exception of the grants made under the LTIP, the elements of compensationdiscussed below are not subject to approvals by the board of directors of our General Partner or any of its committees.SUMMARY COMPENSATION TABLEThe table below sets forth the annual compensation expensed by us for our Named Executive Officers for the fiscalyears ended December 31, 2017 and December 31, 2016. As noted above, the amounts included in the table below reflectonly the portion of compensation expense that is allocated to us pursuant to the MSA. Unit All Other Name and Principal Position Year Salary ($) Bonus ($)(1) Awards(2) Compensation(3) Total ($)John K. Keppler 2017 $214,000 $313,200 $534,997 $4,889 $1,067,086(Chairman of the Board of 2016 $212,913 $433,350 $440,998 $ — $1,087,261Directors, President and Chief Executive Officer) E. Royal Smith 2017 $255,000 $191,250 $382,505 $9,925 $838,680(Executive Vice President, 2016 $253,758 $261,900 $146,881 $6,600 $669,139Operations) Stephen F. Reeves 2017 $193,000 $142,500 $385,997 $5,368 $726,865(Executive Vice President and 2016 $250,075 $243,875 $376,342 $5,168 $875,460Chief Financial Officer) (1)Pursuant to the Enviva Management Annual Incentive Compensation Plan, bonus compensation for fiscal 2017represents the aggregate amount of the annual discretionary cash bonuses paid to each Named Executive Officer.(2)The amounts reflected in this column represent the grant date fair value of phantom units (which include tandemdistribution equivalent rights (“DERs”)) granted to the NEOs pursuant to the LTIP, computed in accordance withFinancial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718. The grant datefair value for time‑based phantom unit awards is based on the closing price of our common units, which was (i) $25.25per unit for awards granted on February 1, 2017 with respect to the 2017 fiscal year and (ii) $18.19 per unit for awardsgranted on February 3, 2016 with respect to the 2016 fiscal year. The grant date fair value of performance‑basedphantom unit awards is reported based on the probable outcome of the performance conditions on the grant date. Thevalue of the performance‑based phantom unit awards granted in 2017, assuming achievement of the maximumperformance level, was (i) $534,997 for Mr. Keppler, (ii) $382,505 for Mr. Smith and (iii) $385,997 for Mr. Reeves. Thevalue of the performance‑based phantom unit awards granted in 2016, assuming achievement of the maximumperformance level, was (i) $440,998 for Mr. Keppler, (ii) $146,881 for Mr. Smith and (iii) $376,342 for Mr. Reeves. SeeNote 16, Equity‑Based Awards, to our consolidated financial statements for additional detail regarding assumptionsunderlying the value of these awards.(3)Amounts reported in the “All Other Compensation” column reflect employer contributions to the Named ExecutiveOfficers’ accounts under the 401(k) plan in which the Named Executive Officers participate.140 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsNARRATIVE DISCLOSURE TO THE SUMMARY COMPENSATION TABLEManagement Services AgreementEffective April 9, 2015, the executive officers of our General Partner became employed by Enviva Management andsplit their time between managing our business and the other businesses of our sponsor. The amount of time that eachexecutive officer devotes to our business and the other businesses of our sponsor is determined based on a variety of factors.In April 2015, we and our General Partner entered into the MSA with Enviva Management. For more information about theMSA, please read Item 13. “Certain Relationships and Related Transactions, and Director Independence—Other Transactionswith Related Persons—Management Services Agreement.”Phantom Unit AwardsOn February 1, 2017, the board of directors of our General Partner granted phantom units under the LTIP to each ofour Named Executive Officers. One‑half of these awards are subject to time‑based vesting conditions (“time‑based phantomunits”) and will become vested on the third anniversary of the grant date so long as the applicable Named Executive Officerremains continuously employed by Enviva Management or one of our affiliates from the grant date through the applicablevesting date. The other half of these awards vest based on the achievement of specific performance metrics(“performance‑based phantom units”). Vested phantom units (less any phantom units withheld to satisfy applicable taxwithholding obligations) will be settled through the issuance of common units within 60 days following the applicablevesting date. While a Named Executive Officer holds unvested phantom units, he is entitled to receive DER credits equal tothe amount of cash distributions paid in respect of a common unit of the Partnership. The DERs included withperformance‑based phantom units are paid in cash within 60 days following the vesting of the associated phantom units (andare forfeited at the same time the associated phantom units are forfeited). The DERs included with time‑based phantom unitsare paid in cash within 60 days following a cash distribution with respect to our common units. The potential accelerationand forfeiture events relating to these phantom units are described in greater detail under “—Potential Payments UponTermination or a Change of Control” below.Employment AgreementsEach of our NEOs is a party to an employment agreement with Enviva Management. We refer to these employmentagreements herein collectively as the “Employment Agreements.” The Employment Agreements of Messrs. Keppler, Smithand Reeves were each amended and restated as of December 1, 2016, August 19, 2016 and May 29, 2015, respectively.Mr. Keppler’s Employment Agreement has a three‑year initial term, Mr. Reeves’s Employment Agreement has a two‑yearinitial term and Mr. Smith’s Employment Agreement has a one‑year initial term. Each Employment Agreement’s initial termautomatically renews annually for successive 12‑month periods unless either party provides written notice of non‑renewal atleast 60 days prior to a renewal date. Under the Employment Agreements, our NEOs are each entitled to an annualized basesalary and are eligible for discretionary annual bonuses based on performance targets established annually by the board ofdirectors of the general partner of our sponsor or a committee thereof, in its sole discretion. Mr. Keppler’s, Mr. Reeves’ andMr. Smith’s Employment Agreements provided that each such annual bonus would have a target value of not less than 150%(in the case of Mr. Keppler), 90% (in the case of Mr. Reeves) or 75% (in the case of Mr. Smith) of the applicable NEO’sannualized base salary. The Employment Agreements also provide that the NEOs will be eligible to receive annual awardsbased upon our common units under the LTIP. For fiscal year 2016, the Employment Agreements provided that such annualLTIP awards would have target values equal to 210%, 150% and 60% of the annualized base salary of Messrs. Keppler,Reeves and Smith, respectively, as in effect of the first day of the 2016 fiscal year. Pursuant to Mr. Keppler’s amended andrestated Employment Agreement, effective for 2017, the target value of Mr. Keppler’s LTIP awards increased from 210% to250% of his annualized base salary in effect on January 1, 2017. In addition, pursuant to Mr. Smith’s amended and restatedEmployment Agreement, effective for 2017, the target value of Mr. Smith’s LTIP awards increased from 60% to 100% of hisannualized base salary in effect on January 1, 2017. As discussed below under “—Potential Payments Upon Termination or aChange in Control,” the Employment Agreements also provide for certain severance payments in the event an NEO’semployment is terminated under certain circumstances.141 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOUTSTANDING EQUITY AWARDS AT 2017 FISCAL YEAR‑ENDThe following table reflects information regarding outstanding equity‑based awards held by our Named ExecutiveOfficers as of December 31, 2017. Option Awards(1) Unit Awards Equity Incentive Equity Number Number of Plan Awards: Incentive of Securities Securities Number of Plan Awards: Underlying Underlying Unearned Market Value Unexercised Unexercised Number of Market Value Performance- of Unearned Options Options Option Option Units That of Units That based Units Units That Unexercisable Exercisable Exercise Expiration Have Not Have Not That Have Have NotName (#)(2) (#)(3) Price ($) Date ($) Vested(#)(5) Vested($)(6) Not Vested(#) Vested($)(7)John K. Keppler Class C-1 Units — 232,941 N/A(4) N/A(4) Class C-2 Units — 666,000 N/A(4) N/A(4) Class E-1 Units — 275,000 N/A(4) N/A(4) Phantom Units 69,544 $1,922,892 34,772 $961,446E. Royal Smith Class C-4 Units — 175,000 N/A(4) N/A(4) Class E-1 Units — 25,000 N/A(4) N/A(4) Phantom Units 17,130 $487,470 8,815 $243,735Stephen F. Reeves Class C-2 Units — 200,000 N/A(4) N/A(4) Class E-1 Units — 225,000 N/A(4) N/A(4) Phantom Units 41,256 $1,140,728 20,628 $570,364(1)The equity awards that are disclosed in this Outstanding Equity Awards at 2017 Fiscal Year‑End table under OptionAwards are incentive units in Enviva Holdings, LP (“Holdings”) that are intended to constitute profits interests forfederal tax purposes rather than traditional option awards.(2)Awards reflected as “Unexercisable” are Holdings incentive units that have not yet become vested.(3)Awards reflected as “Exercisable” are Holdings incentive units that have become vested, but have not yet been settled.(4)These equity awards are not traditional options and, therefore, there is no exercise price or expiration date associatedwith them.(5)The phantom units subject to time‑based vesting conditions will vest on (i) February 1, 2020 with respect to awardsgranted in 2017 (ii) February 3, 2019 with respect to awards granted in 2016 and (iii) May 4, 2018 with respect toawards granted in 2015, each so long as the applicable Named Executive Officer remains continuously employed byEnviva Management or one of our affiliates from the grant date through such vesting date.(6)The amounts reflected in this column represent the market value of our common units underlying the phantom unitawards granted to the Named Executive Officers, computed based on the closing price of our common units onDecember 29, 2017, which was $27.65 per unit.(7)The values reported in this column are calculated by multiplying the market value of our common units on December29, 2017 ($27.65) by the number of common units that would be earned if the threshold (rather than target) performancetargets were met for those awards. The actual payout values may increase or decrease based upon the value of ourcommon units and the settlement requirements set forth in the award agreements.ADDITIONAL NARRATIVE DISCLOSURERetirement BenefitsWe have not maintained, and do not currently maintain, a defined benefit pension plan or a nonqualified deferredcompensation plan providing for retirement benefits. Our Named Executive Officers currently participate in a142 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents401(k) plan maintained by Enviva Management. The 401(k) plan permits all eligible employees, including the NamedExecutive Officers, to make voluntary pre‑tax contributions and/or Roth after‑tax contributions to the plan. In addition,Enviva Management is permitted to make discretionary matching contributions under the plan. Matching contributionsunder the plan are subject to a three‑year cliff vesting schedule. All contributions under the plan are subject to certain annualdollar limitations, which are periodically adjusted for changes in the cost of living.Potential Payments Upon Termination or a Change in ControlUnder the Employment Agreements, if the applicable NEO’s employment is terminated without “cause,” by theapplicable NEO for “good reason” or due to the applicable NEO’s “disability,” then so long as the applicable NEO executes(and does not revoke within the time provided to do so) a release in a form satisfactory to Enviva Management within thetime period specified in the Employment Agreements, such NEO will receive the following severance benefits: (i) in the caseof Mr. Keppler, a severance payment (generally payable in installments) in an aggregate amount equal to 1.5 (or, if suchtermination occurs within 12 months following a “change in control,” 2.0) times the sum of his annualized based salary andtarget annual bonus as in effect on the date of such termination; (ii) in the case of Messrs. Reeves and Smith, a severancepayment (generally payable in installments) in an aggregate amount equal to the sum of his annualized based salary andtarget annual bonus as in effect on the date of such termination; (iii) full vesting of outstanding awards under our LTIP(which vesting for awards that include a performance requirement (other than continued service) will be based on (1) actualperformance if such termination occurs within the six‑month period preceding to the expiration of the performance period or(2) target performance if such termination occurs at any other time during the performance period); and (iv) monthlyreimbursement for the amount the NEO pays for continuation coverage under the employer’s group health plans for up to12 months following such termination (or, in the case of Mr. Keppler, up to 18 months following such termination, plusMr. Keppler would be entitled to an additional cash payment equal to six times his monthly premium for such coverage inthe event his employment terminates within 12 months following a change in control and he has not obtained coverageunder a group health plan sponsored by another employer within the time period specified in his Employment Agreement).Under the Employment Agreements, “cause” means the applicable NEO’s: (i) material breach of any policyestablished by Enviva Management or its affiliates that pertains to drug and/or alcohol abuse (or health and safety in the caseof Mr. Keppler) and is applicable to the NEO; (ii) engaging in acts of disloyalty to the employer or its affiliates, includingfraud, embezzlement, theft, commission of a felony, or proven dishonesty; or (iii) willful misconduct in the performance of, orwillful failure to perform a material function of, the NEO’s duties under the Employment Agreement. In addition, “goodreason,” for purposes of the Employment Agreements, means, without the applicable NEO’s consent and subject to certainnotice and cure periods, (w) the material diminution in such NEO’s authority, duties, title or responsibilities, (x) the materialdiminution in such NEO’s annualized base salary, minimum target annual bonus opportunity or target annual long‑termincentive award, (y) the relocation of the geographic location of such NEO’s principal place of employment by more than100 miles from the location of his principal place of employment as of the effective date of the Employment Agreement or(z) the employer’s delivery of a written notice of non‑renewal of the Employment Agreement. “Disability” is defined forpurposes of the Employment Agreements as existing if the applicable NEO is unable to perform the essential functions of hisposition, with reasonable accommodation, due to an illness or physical or mental impairment or other incapacity thatcontinues for a period in excess of 90 days, whether consecutive or not, in any period of 365 consecutive days. Thedetermination of a disability will be made by the employer after obtaining an opinion from a doctor selected by theemployer. A “change in control” is defined in Mr. Keppler’s Employment Agreement as (1) the sale or disposal by Holdingsof all or substantially all of its assets to any person other than an affiliate of Holdings, (2) the merger or consolidation ofHoldings with or into another entity (other than a merger or consolidation in which unitholders in Holdings immediatelyprior to such transaction retain a greater than 50% equity interest in the surviving entity), (3) the failure of the RiverstoneFunds and its affiliates to possess the power to direct the management and policies of Holdings, or (4) (A) the sale of all orsubstantially all of our assets to any person other than one of our affiliates, (B) our merger or consolidation with or intoanother entity (other than a merger or consolidation in which our unitholders immediately prior to such transaction retain agreater than 50% equity interest in the surviving entity), or (C) the failure of the Riverstone Funds and its affiliates to possessthe power to direct our management and policies.The Employment Agreements also contain certain restrictive covenants pursuant to which our NEOs haverecognized an obligation to comply with, among other things, certain confidentiality covenants as well as covenants not143 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsto compete in a defined market area with Enviva Management (or any of its affiliates to which they have provided services orabout which they have obtained confidential information) or solicit their employer’s or its affiliates’ employees, in each case,during the term of the agreement and for a period of one year thereafter.Director CompensationOfficers or employees of our predecessor or our sponsor or its affiliates who also serve as directors of our GeneralPartner do not receive additional compensation for such service. Directors of our General Partner who are not also officers oremployees of our predecessor or our sponsor or its affiliates (“independent directors”) receive compensation for their serviceon our General Partner’s board of directors and committees thereof consisting of an annual retainer of $75,000, an additionalannual retainer of $15,000 for service as the chair of any standing committee, an additional payment of $1,500 each timesuch independent director attends a board or committee meeting, and one or more awards under the LTIP relating to ourcommon units that, in the aggregate, result in approximately $100,000 of annual compensation (based on the value of ourcommon units on the date of grant of such awards). As compensation for service on the Conflicts Committee, established bythe board of directors of our General Partner to evaluate the Wilmington Drop‑Down, each Conflicts Committee Director waspaid a fee of $1,500 per meeting of the Conflicts Committee and Mr. Bumgarner, as Chairman was paid a flat fee of $25,000,which fee was in addition to the per meeting fee payable to the Chairman. Until the earlier of (i) four years after anindependent director is appointed to the board of directors of our General Partner or (ii) the date on which such independentdirector first holds an amount of our common units with an aggregate value equal to at least $250,000, one‑half of all annualretainers and payments for attending board or committee meetings are paid to such independent director in the form ofcommon units pursuant to the LTIP and the remainder are paid in cash. Each non‑employee director is reimbursed forout‑of‑pocket expenses incurred in connection with attending board and committee meetings. Each director will be fullyindemnified by us for actions associated with serving as a director to the fullest extent permitted under Delaware law.The following table provides information concerning the compensation of our non-employee directors for the fiscalyear ended December 31, 2017. Fees Earned Common Phantom or Paid in Unit Unit Name Cash ($)(1) Awards ($)(2) Awards ($)(3) Total ($)John C. Bumgarner, Jr. $191,000 $ — $99,990 $290,990William K. Reilly $76,500 $22,618 $99,990 $199,108Gary L. Whitlock $60,000 $56,009 $99,990 $215,999Janet S. Wong $119,250 $17,259 $99,990 $236,499(1)Includes annual cash retainer fee and committee chair fees for each independent director during fiscal 2016, as morefully explained above.(2)Reflects the aggregate grant date fair value of common units granted to the independent directors pursuant to the LTIP,as part of the compensation paid to independent directors who do not hold common units with an aggregate value equalto at least $250,000.(3)Reflects the aggregate grant date fair value of phantom units (which include tandem DERs) granted to the independentdirectors pursuant to the LTIP, computed in accordance with FASB ASC Topic 718. See Note 16, Equity‑Based Awards,to our consolidated financial statements on Form 10‑K for the year ended December 31, 2017 for additional detailregarding assumptions underlying the value of these equity awards. The grant date fair value for the phantom unitawards is based on the closing price of our common units on the grant date of February 1, 2017, which was $25.25 perunit. Each independent director’s phantom unit awards vest in full on February 1, 2018, in each case, so long as thedirector continues to serve on the board of directors of our General Partner through such date.144 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS The following table sets forth the beneficial ownership of common units and subordinated units of EnvivaPartners, LP as of February 16, 2018 held by:·beneficial owners of 5% or more of our common units;·each director and named executive officer; and·all of our directors and executive officers as a group.Unless otherwise noted, the address for each beneficial owner listed below is 7200 Wisconsin Ave., Suite 1000,Bethesda, MD 20814. Percentage of Percentage of Common and Percentage of Subordinated Subordinated Subordinated Common Units Common Units Units Units Units Beneficially Beneficially Beneficially Beneficially Beneficially Name of Beneficial Owner Owned(1) Owned Owned Owned Owned Enviva Holdings, LP(2)(3)(4) 1,265,453 8.8% 11,905,138 100% 50.0%Enviva Partners GP, LLC — —% — — —%Goldman Sachs Asset Management(5) 905,988 6.3% — — 3.4%ClearBridge Investments, LLC(6) 665,000 4.6% — — 2.5%FS Global Credit Opportunities Fund(7) 656,974 4.6% — — 2.5%John K. Keppler 24,558 * — — *%Stephen F. Reeves 12,492 * — — *%E. Royal Smith 4,205 * — — *%Ralph Alexander — —% — — —%John C. Bumgarner, Jr.(8) 179,023 1.2% — — *%Robin J. A. Duggan — —% — — —%Michael B. Hoffman — —% — — —%Christopher B. Hunt — —% — — —%William K. Reilly 23,598 * — — *%Gary L. Whitlock 11,903 * — — *%Carl L. Williams — —% — — —%Janet S. Wong 20,727 * — — *%All directors and executive officers as agroup (16 persons) 306,124 2.1% — — 1.2%* Less than 1% of common units outstanding.(1)This column does not include phantom units granted to our directors and officers pursuant to the LTIP.(2)Of this aggregate amount beneficially owned, (i) Enviva Development Holdings, LLC, a wholly owned subsidiary ofEnviva Holdings, LP, has shared voting power over 860,315 common units and shared dispositive power over 860,315common units, (ii) Enviva Holdings, LP has shared voting power over 1,265,453 common units and shared dispositivepower over 1,265,453 common units, (iii) Enviva Holdings GP, LLC has shared voting power over 1,265,453 commonunits and shared dispositive power over 1,265,453 common units, (iv) R/C Wood Pellet Investment Partnership, L.P. hasshared voting power over 1,265,453 common units and shared dispositive power over 1,265,453 common units,(v) Riverstone/Carlyle Renewable Energy Partners II, L.P. has shared voting power over 1,265,453 common units andshared dispositive power over 1,265,453 units and (vi) R/C Renewable Energy GP II, L.L.C. has shared voting powerover 1,265,453 common units and shared dispositive power over 1,265,453 common units.145 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents(3)R/C Renewable Energy GP II, L.L.C is the general partner of Riverstone/Carlyle Renewable Energy Partners II, L.P.,which is the general partner of R/C Wood Pellet Investment Partnership, L.P., which is the sole member of EnvivaHoldings GP, LLC, which is the general partner of Enviva Holdings, LP, which is the sole member of Enviva MLPHoldco, LLC and Enviva Cottondale Acquisition I, LLC. R/C Renewable Energy GP II, L.L.C. is managed by asix‑person investment committee. Pierre F. Lapeyre, Jr., David M. Leuschen, Ralph Alexander, Michael B. Hoffman,Daniel A. D’Aniello and Edward J. Mathias are the members of the investment committee of R/C Renewable Energy GPII, L.L.C.(4)The address for each of R/C Renewable Energy GP II, L.L.C., Riverstone/Carlyle Renewable Energy Partners II, L.P. andR/C Wood Pellet Investment Partnership, L.P. is c/o Riverstone Holdings, LLC, 712 Fifth Avenue, 36th Floor, NewYork, New York 10019.(5)As reported on Schedule 13G/A as of December 31, 2017 and filed with the SEC on January 24, 2018 by GS InvestmentStrategies, LLC and Goldman Sachs Asset Management, L.P. (collectively, “Goldman Sachs Asset Management”),Goldman Sachs Asset Management discloses that it beneficially owns in the aggregate 905,988 common units. Of thisaggregate amount beneficially owned, (i) GS Investment Strategies, LLC is reported to have shared voting power over905,988 common units and shared dispositive power over 905,988 common units and (ii) Goldman Sachs AssetManagement, L.P. is reported to have shared voting power over 905,988 common units and shared dispositive powerover 905,988 common units. The address of Goldman Sachs Asset Management is 200 West Street, New York, NY10282.(6)As reported on Schedule 13G /A as of December 31, 2017 and filed with the SEC on February 14, 2017 by ClearBridgeInvestments, LLC, ClearBridge Investments, LLC discloses that it beneficially owns in the aggregate 665,000 commonunits. Of this aggregate amount beneficially owned, ClearBridge Investments, LLC is reported to have sole voting powerover 665,000 common units and sole dispositive power over 665,000 common units. The address of ClearBridgeInvestments, LLC is 620 8th Avenue, New York, NY 10018.(7)As reported on Schedule 13G as of December 31, 2017 and filed with the SEC on January 13, 2017 by (i) FS GlobalCredit Opportunities Fund, (ii) FS Global Advisor, LLC, which serves as the investment adviser to FS Global CreditOpportunities Fund, (iii) Michael C. Forman, who is a control person of FS Global Advisor, LLC and (iv) David J.Adelman, who is a control person of FS Global Advisor, LLC (collectively, the “FS Global Reporting Persons”), the FSGlobal Reporting Persons disclose that they beneficially own in the aggregate 656,974 common units. Of this aggregateamount beneficially owned, (i) FS Global Credit Opportunities Fund is reported to have shared voting power over656,974 common units and shared dispositive power over 656,974 common units; (ii) FS Global Advisor, LLC isreported to have shared voting power over 656,974 common units and shared dispositive power over 656,974 commonunits; (iii) Michael C. Forman is reported to have shared voting power over 656,974 common units and shareddispositive power over 656,974 common units; and (iv) David J. Adelman is reported to have shared voting power over656,974 common units and shared dispositive power over 656,974 common units. The address of the FS GlobalReporting Persons is 201 Rouse Boulevard, Philadelphia, PA 19112.(8)These 170,632 common units are held by the Bumgarner Family Trust. Mr. Bumgarner has investment control over theseunits.146 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsEquity Compensation Plan InformationThe following table sets forth information with respect to the securities that may be issued under the LTIP as ofDecember 31, 2017. Number of securities remaining available for Number of future issuance securities to be Weighted- under equity issued upon average exercise compensation exercise of price of plans (excluding outstanding outstanding securities options, warrants options, warrants reflected in and rights and rights ($) column (a))Plan category (a)(2) (b)(3) (c)(4)Equity compensation plans approved by security holders(1) 1,091,947 n/a 2,738,182Equity compensation plans not approved by security holders — — —Total 1,091,947 n/a 2,738,182(1)The LTIP was approved by the board of directors of our General Partner prior to the IPO.(2)The amount in column (a) of this table reflects the aggregate number of outstanding phantom units under the LTIP as ofDecember 31, 2017.(3)This column is not applicable because only phantom units have been granted under the LTIP and phantom units do nothave an exercise price.(4)The amount in this column reflects the total number of common units remaining available for future issuance under theLTIP as of December 31, 2017. For additional information about the LTIP and the awards granted thereunder, pleaseread Part III, Item 11. “Executive Compensation.” ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEAs of February 16, 2018, our sponsor owned 1,265,453 common units and 11,905,138 subordinated unitsrepresenting approximately 50% limited partner interest in us. In addition, our sponsor owns and controls (and appoints allthe directors of) our General Partner, which maintains a non‑economic general partner interest in us and owns all ourincentive distribution rights.The terms of the transactions and agreements disclosed in this section were determined by and among affiliatedentities and, consequently, are not the result of arm’s‑length negotiations. These terms are not necessarily at least as favorableto the parties to these transactions and agreements as the terms that could have been obtained from unaffiliated third parties.Distributions and Payments to Our General Partner and Its AffiliatesWe generally make 100% of our cash distributions to our unitholders, including affiliates of our General Partner. Inaddition, if distributions exceed the minimum quarterly distribution and other higher target distribution levels, our GeneralPartner, or the holder of our incentive distribution rights, will be entitled to increasing percentages of the distributions, up to50.0% of the distributions above the highest target distribution level.Assuming we have sufficient cash available for distribution to pay the full minimum quarterly distribution on all ofour outstanding common units and subordinated units for four quarters, our General Partner and its affiliates would receive anannual distribution of approximately $21.9 million on their units.147 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOur General Partner does not receive a management fee or other compensation for its management of ourpartnership, but we reimburse our General Partner and its affiliates for all direct and indirect expenses they incur andpayments they make on our behalf. These expenses include salary, bonus, incentive compensation and other amounts paid topersons who perform services for us or on our behalf and expenses allocated to our General Partner by its affiliates. Under ourMSA, we are obligated to reimburse Enviva Management for all direct or indirect costs and expenses incurred by, orchargeable to, Enviva Management in connection with its provision of services necessary for the operation of our business. Ifthe MSA were terminated without replacement, or our General Partner or its affiliates provided services outside of the scopeof the MSA, our partnership agreement would require us to reimburse our General Partner and its affiliates for all expensesthey incur and payments they make on our behalf. Our partnership agreement does not set a limit on the amount of expensesfor which our General Partner and its affiliates may be reimbursed.If our General Partner withdraws or is removed, its non‑economic general partner interest and its incentivedistribution rights will either be sold to the new general partner for cash or converted into common units, in each case for anamount equal to the fair market value of those interests.If we are ever liquidated, the partners, including our General Partner, will be entitled to receive liquidatingdistributions according to their respective capital account balances.Agreements with AffiliatesSampson Contribution AgreementOn December 14, 2016, we consummated the transactions contemplated by a contribution agreement (the “SampsonContribution Agreement”) with the First Hancock JV, which is a joint venture between our sponsor, Hancock NaturalResource Group, Inc., and certain other affiliates of John Hancock Life Insurance Company (U.S.A.). Under the terms of theContribution Agreement, we acquired from the First Hancock JV all of the issued and outstanding limited liability companyinterests in Enviva Pellets Sampson, LLC (“Sampson”) for total consideration of $175.0 million. Sampson owns a woodpellet production plant in Sampson Country, North Carolina (the “Sampson plant”), that is expected to produce 500,000MTPY of wood pellets in 2017 and to reach its full production capacity of approximately 600,000 MTPY in 2019. Theacquisition (the “Sampson Drop‑Down”) included the Sampson plant, a ten‑year 420,000 MTPY take‑or‑pay off‑takecontract, a 15‑year, 95,000 MTPY off‑take contract with the First Hancock JV, and related third‑party shipping contracts. TheSampson Drop‑Down included the payment of $139.6 million in cash, net of a purchase price adjustment of $5.4 million, tothe First Hancock JV, the issuance of 1,098,415 common units at a value of $27.31, or an aggregate value of $30.0 million, toaffiliates of John Hancock Life Insurance Company (U.S.A.).We also entered into the Terminal Services Agreement by and between Enviva, LP and Wilmington pursuant towhich Wilmington agreed to provide terminal services at the Wilmington terminal for production from the Sampson plant.Wilmington Contribution AgreementOn October 2, 2017, pursuant to the terms of a contribution agreement with the First Hancock JV (the “WilmingtonContribution Agreement”), we acquired from the First Hancock JV all of the issued and outstanding limited liabilitycompany interests in Enviva Port of Wilmington, LLC (“Wilmington”) for a purchase price of $130.0 million. The purchaseprice included an initial payment of $54.6 million, net of an approximate purchase price adjustment of $1.4 million. Theacquisition (the “Wilmington Drop-Down”) included the Wilmington terminal and a long-term terminal services agreementwith the Partnership’s sponsor to handle throughput volumes sourced by the sponsor from a wood pellet production plant inGreenwood, South Carolina. The terminal services agreement with the Partnership’s sponsor provides for deficiencypayments to Wilmington if quarterly minimum throughput requirements are not met. The Wilmington terminal will handleup to approximately 600,000 MTPY of throughput from the Partnership’s production plant in Sampson County, NorthCarolina.In addition, the Wilmington Contribution Agreement contemplates that Wilmington will enter into a long-termterminal services agreement (the “Wilmington Hamlet TSA”) with the First Hancock JV and Enviva Pellets Hamlet, LLC(“Hamlet”) to receive, store and load wood pellets from the First Hancock JV’s proposed production plant in148 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsHamlet, North Carolina (the “Hamlet plant”) when the First Hancock JV completes construction of the Hamlet plant. TheWilmington Hamlet TSA also provides for deficiency payments to Wilmington if minimum throughput requirements are notmet. Pursuant to the Wilmington Contribution Agreement, following notice of the anticipated first delivery of wood pelletsto the Wilmington terminal from the Hamlet plant, Wilmington, Hamlet, and the First Hancock JV will enter into theWilmington Hamlet TSA and we will make a final payment of $74.0 million in cash or common units representing limitedpartner interests in the Partnership to the First Hancock JV, subject to certain conditions, as deferred consideration for theWilmington Drop-Down.Wilmington also entered into a throughput option agreement with the our sponsor granting the sponsor, subject tocertain conditions, the option to obtain terminal services at the Wilmington terminal at marginal cost throughput rates forwood pellets produced by one of our sponsor’s potential wood pellet production plants.Related-Party IndemnificationIn connection with the Sampson Drop-Down, the First Hancock JV agreed to indemnify us, our affiliates, and ourrespective officers, directors, managers, counsel, agents and representatives from all costs and losses arising from certainvendor liabilities and claims (“Retained Matters”) related to the construction of the Sampson plant that were included in thenet assets contributed.In connection with the Wilmington Drop-Down, the First Hancock JV agreed to indemnify us, our affiliates, and ourrespective officers, directors, managers, counsel, agents and representatives from all costs and losses arising from certainvendor liabilities and claims related to the construction of the Port of Wilmington that were included in the net assetscontributed.Sampson Construction PaymentsPursuant to three payment agreements with the First Hancock JV dated effective as of July 27, 2017, September 30,2017, and December 31, 2017 (together, the “Payment Agreements”), the First Hancock JV agreed to pay an aggregateamount of $1.4 million in consideration for costs incurred by us to repair or replace certain equipment at the Sampson plantfollowing the consummation of the Sampson Drop-Down.Terminal Services AgreementsIn connection with the Wilmington Drop-Down, Wilmington and the sponsor entered into a terminal servicesagreement dated October 2, 2017 providing for wood pellet receipt, storage, handling and loading services by theWilmington terminal on behalf of the sponsor (the “Holdings TSA”). Pursuant to the Holdings TSA, which remains in effectuntil September 1, 2026, the sponsor agreed to deliver a minimum of 125,000 MT per quarter and pay a fixed fee on a per-tonbasis for the terminal services.The Holdings TSA was amended and assigned to Enviva Pellets Greenwood, LLC, a wholly owned subsidiary ofEnviva JV Development Company, LLC, a joint venture between our sponsor, Hancock Natural Resource Group, Inc. andcertain other affiliates of John Hancock Life Insurance Company (U.S.A.) (“Second Hancock JV”).EVA‑MGT ContractsIn January 2016 we entered into a contract with the First Hancock JV to supply 375,000 MTPY of wood pellets (the“EVA‑MGT Contract”) to MGT Teesside Limited’s Tees Renewable Energy Plant (the “Tees REP”), which is underdevelopment. The EVA‑MGT Contract commences in 2019, ramps to full supply in 2021 and continues through 2034. TheEVA-MGT Contract is denominated in U.S. Dollars for commissioning volumes in 2019 and in British Pound Sterling(“GBP”) thereafter.We entered into a second supply agreement with the First Hancock JV in connection with the Sampson Drop‑Downto supply an additional 95,000 MTPY of the contracted volume to the Tees REP. The contract, which is denominated inGBP, commences in 2019 and continues through 2034.149 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsRegistration Rights AgreementIn connection with the IPO, on May 4, 2015, we entered into a registration rights agreement with our sponsorpursuant to which we may be required to register the sale of the (i) common units issued (or issuable) to our sponsor pursuantto the IPO Contribution Agreement, (ii) subordinated units and (iii) common units issuable upon conversion of thesubordinated units pursuant to the terms of the partnership agreement (together, the “Registrable Securities”) it holds. Underthe registration rights agreement, our sponsor will have the right to request that we register the sale of Registrable Securitiesheld by it, and our sponsor will have the right to require us to make available shelf registration statements permitting sales ofRegistrable Securities into the market from time to time over an extended period, subject to certain limitations. In addition,the registration rights agreement gives our sponsor piggyback registration rights under certain circumstances. Theregistration rights agreement also includes provisions dealing with indemnification and contribution and allocation ofexpenses. All of the Registrable Securities held by our sponsor and any permitted transferee will be entitled to theseregistration rights.Purchase Rights AgreementIn connection with the IPO, on May 4, 2015, we entered into a the Purchase Rights Agreement with our sponsorpursuant to which our sponsor will provide to us, for a period of five years following the closing of our IPO, a right of firstoffer to purchase any wood pellet production plant or deep‑water marine terminal that it, its subsidiaries or any other entitythat it controls (including the Hancock JVs) owns and proposes to sell (each, a “ROFO Asset”). We will have thirty daysfollowing receipt of the sponsor entity’s intention to sell a ROFO Asset to propose an offer for the ROFO Asset. If we submitan offer, our sponsor will negotiate with us exclusively and in good faith to enter into a letter of intent or definitivedocumentation for the purchase of the ROFO Asset on mutually acceptable terms. If we are unable to agree to terms within45 days, the sponsor entity will have 150 days to enter into definitive documentation with a third party purchaser on termsthat are, in the good faith judgment of the sponsor entity selling such ROFO Assets, superior to the most recent offerproposed by us.Biomass Purchase Agreement – Hancock JVOn September 7, 2016, Sampson entered into a confirmation under the Biomass Purchase Agreement pursuant towhich Sampson agreed to sell to the sponsor 60,000 MT of wood pellets through August 31, 2017. On June 23, 2017, thesponsor satisfied its take-or-pay obligation under the agreement.Biomass Option Agreement – Enviva Holdings, LPOn February 3, 2017, we entered into a master biomass purchase and sale agreement and a confirmation thereunder,which confirmation was amended on April 1, 2017, each with the sponsor (together, the “Option Contract”), pursuant towhich we have the option to purchase certain volumes of wood pellets from the sponsor, from time to time at a price permetric ton determined by reference to a market index. The sponsor has a corresponding right to re-purchase volumespurchased by us pursuant to the Option Contract at a price per metric ton determined by reference to such market index atthen-prevailing rates in the event that we purchase more than 45,000 MT of wood pellets pursuant to the Option Contract.Management Services AgreementOn April 9, 2015, all of our employees and management became employed by Enviva Management, and we and ourGeneral Partner entered into the MSA with Enviva Management, pursuant to which Enviva Management provides us with allservices necessary for the operation of our business. The MSA has a term of five years, which is automatically renewed unlessterminated by us for cause. Enviva Management is also able to terminate the agreement if we fail to reimburse it for its costsand expenses allocable to us.Pursuant to the MSA, we reimburse Enviva Management for all direct or indirect costs and expenses incurred by, orchargeable to, Enviva Management in connection with the provision of the services, including, without limitation, salaryand benefits of employees engaged in providing such services, as well as office rent, expenses and other overhead costs ofEnviva Management. Enviva Management determines the amount of costs and expenses that is allocable to us.150 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsOther Transactions with Related PersonsEnviva FiberCo, LLCWe purchase raw materials from Enviva FiberCo, LLC (“FiberCo”), a wholly owned subsidiary of the sponsor. Rawmaterial purchases from FiberCo during 2017 and 2016 were $8.5 million and $3.7 million, respectively.Procedures for Review, Approval and Ratification of Transactions with Related PersonsIn connection with the closing of our IPO, the board of directors of our General Partner adopted policies for thereview, approval and ratification of transactions with related persons. The board adopted a written Code of Business Conductand Ethics, under which a director is expected to bring to the attention of the chief executive officer or the board any conflictor potential conflict of interest that may arise between the director or any affiliate of the director, on the one hand, and us orour General Partner on the other. The resolution of any such conflict or potential conflict should, at the discretion of theboard in light of the circumstances, be determined by a majority of the disinterested directors.Under the provisions of our Code of Business Conduct and Ethics, any executive officer will be required to avoidconflicts of interest unless approved by the board of directors of our General Partner.The Code of Business Conduct and Ethics described above was adopted in connection with the closing of our IPOand, as a result, the transactions described above that were entered into prior to or in connection with the IPO were notreviewed according to such procedures.The board has also adopted a Conflicts of Interest Policy, under which if a conflict or potential conflict of interestarises between our General Partner or its affiliates, on the one hand, and us or our unitholders, on the other hand, theresolution of any such conflict or potential conflict should be addressed by the board of directors of our General Partner inaccordance with the provisions of our partnership agreement. At the discretion of the board in light of the circumstances, theresolution may be determined by the board in its entirety or by a conflicts committee meeting the definitional requirementsfor such a committee under our partnership agreement.The Conflicts of Interest Policy also provides that the board may determine on our behalf that certain contractsbetween us, on the one hand, and the General Partner and any of its affiliates, on the other hand, are fair and reasonable and inour best interests, so long as the board reasonably determines that such contracts are on terms and conditions not lessfavorable to us than could be obtained on an arm’s‑length basis from an unrelated third party, taking into account the totalityof the relationships between all parties involved. Transactions described above that were entered into prior to or inconnection with the IPO were not reviewed according to such procedures.Director IndependenceSee Part III, Item 10. “Directors, Executive Officers and Corporate Governance” for information regarding thedirectors of our General Partner and independence requirements applicable to the board of directors of our General Partnerand its committees. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICESKPMG LLP (“KPMG”) served as our independent auditor for the years ended December 31, 2017, 2016 and 2015.The following table presents fees paid for professional audit services rendered by KPMG for the audit of our151 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contentsannual financial statements for the years ended December 31, 2017, 2016 and 2015, and fees for other services rendered byKPMG: Year Ended December 31, (in thousands) 2017 2016 2015Audit Fees(1) $1,902 $1,205 $1,040Audit-Related Fees — — —Tax Fees — — —All Other Fees — — —Total $1,902 $1,205 $1,040(1)Fees for audit services related to the fiscal year consolidated audit, quarterly reviews, registration statements andservices that were provided in connection with statutory and regulatory filings.Policy for Approval of Audit and Permitted Non‑Audit ServicesBefore the independent registered public accounting firm is engaged by us or our subsidiaries to render audit ornon‑audit services, the audit committee must pre‑approve the engagement. Audit committee pre‑approval of audit andnon‑audit services is not required if the engagement for the services is entered into pursuant to pre‑approval policies andprocedures established by the audit committee. The chairman of the audit committee has the authority to grant pre‑approvals,provided such approvals are within the pre‑approval policy and presented to the audit committee at a subsequent meeting.The audit committee approved the appointment of KPMG as our independent auditor to conduct the audit of ourconsolidated financial statements for the year ended December 31, 2017 and all of the services described above.152 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) Certain documents are filed as a part of this Annual Report and are incorporated by reference and found onthe pages below.1.Financial Statements—Please read Part II, Item 8. “Financial Statements and Supplementary Data—Index toFinancial Statements.”2.All schedules have been omitted because they are either not applicable, not required or the information called fortherein appears in the consolidated financial statements or notes thereto.3.Exhibits—Exhibits required to be filed by Item 601 of Regulation S‑K set forth below are incorporated herein byreference.153 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsEXHIBIT INDEXExhibitNumber Exhibit2.1 Contribution Agreement by and between Enviva Wilmington Holdings, LLC and Enviva Partners, LP datedMay 8, 2017 (Exhibit 2.1, Form 8‑K filed May 12, 2017, File No. 001‑37363)3.1 Certificate of Limited Partnership of Enviva Partners, LP (Exhibit 3.1, Form S‑1 Registration Statement filedOctober 28, 2014, File No. 333‑199625)3.2 First Amended and Restated Agreement of Limited Partnership of Enviva Partners, LP, dated May 4, 2015, byEnviva Partners GP, LLC (Exhibit 3.1, Form 8‑K filed May 4, 2015, File No. 001‑37363)3.3 Amendment No. 1 to the First Amended and Restated Agreement of Limited Partnership of Enviva Partners, LP,effective as of December 18, 2017, by Enviva Partners GP, LLC (Exhibit 3.1, Form 8-K filed December 21,2017)4.1 Indenture, dated as of November 1, 2016, by and among Enviva Partners, LP, Enviva Partners Finance Corp., thesubsidiary guarantors party thereto and Wilmington Trust, National Association, as trustee (Exhibit 4.1,Form 8‑K filed November 3, 2016, File No. 001‑37363)4.2 Form of 8.5% Senior Note due 2021 (Exhibit 4.2, Form 8‑K filed November 3, 2016, File No. 001‑37363)4.3 Registration Rights Agreement, dated May 4, 2015, by and among Enviva Partners, LP, Enviva MLPHoldco, LLC and Enviva Cottondale Acquisition I, LLC (Exhibit 4.1, Form 8‑K filed May 4, 2015, FileNo. 001‑37363)10.1 Purchase Rights Agreement, dated May 4, 2015, by and among Enviva Partners, LP, Enviva Partners GP, LLCand Enviva Holdings, LP (Exhibit 10.2, Form 8‑K filed May 4, 2015, File No. 001‑37363)10.2† Enviva Partners, LP Long‑Term Incentive Plan (Exhibit 4.3, Form S‑8 Registration Statement filed April 30,2015, File No. 333‑203756)10.3† Management Services Agreement by and among Enviva Partners, LP, Enviva Partners GP, LLC, Enviva, LP,Enviva GP, LLC, the subsidiaries of Enviva, LP party thereto and Enviva Management Company, LLC, dated asof April 9, 2015 (Exhibit 10.12, Form S‑1 Registration Statement filed April 15, 2015, File No. 333‑199625)10.4 Credit Agreement, dated as of April 9, 2015, among Enviva Partners, LP, as Borrower, the Lenders party theretoand Barclays Bank PLC, as Administrative Agent and Collateral Agent (Exhibit 10.13, Form S‑1 RegistrationStatement filed April 15, 2015, File No. 333‑199625)10.5 Master Biomass Purchase and Sale Agreement, dated as of April 9, 2015, by and between Enviva, LP andEnviva Wilmington Holdings, LLC (Exhibit 10.8, Form 8‑K filed May 4, 2015, File No. 001‑37363)10.6 Terminal Services Agreement, dated April 9, 2015, by and between Enviva Port of Chesapeake, LLC andEnviva Wilmington Holdings, LLC (Exhibit 10.7, Form 8‑K filed May 4, 2015, File No. 001‑37363)10.7 License Agreement, dated April 9, 2015, by and among Enviva Holdings, LP, Enviva Partners GP, LLC andEnviva Partners, LP (Exhibit 10.3, Form 8‑K filed May 4, 2015, File No. 001‑37363)10.8† Form of Phantom Unit Award Grant Notice and Award Agreement (performance‑based vesting for employees)(Exhibit 10.21, Form S‑1 Registration Statement filed April 3, 2015, File No. 333‑199625)10.9† Form of Phantom Unit Award Grant Notice and Award Agreement (time‑based vesting for employees)(Exhibit 10.20, Form S‑1 Registration Statement filed April 3, 2015, File No. 333‑199625)10.10† Form of Phantom Unit Award Grant Notice and Award Agreement (non‑employee directors) (Exhibit 10.22,Form S‑1 Registration Statement filed April 3, 2015, File No. 333‑199625)10.11† First Amended and Restated Employment Agreement between Stephen F. Reeves and Enviva ManagementCompany, LLC, dated May 29, 2015 (Exhibit 10.1, Form 8‑K filed May 29, 2015, File No. 001‑37363)10.12† First Amended and Restated Employment Agreement between William H. Schmidt, Jr. and Enviva ManagementCompany, LLC, dated May 29, 2015 (Exhibit 10.2, Form 8‑K filed May 29, 2015, File No. 001‑37363)10.13† Form of Unit Award Grant Notice and Award Agreement (non‑employee directors) (Exhibit 10.15, QuarterlyReport on Form 10‑Q for the quarterly period ended June 30, 2015 filed July 31, 2015, File No. 001‑37363)154 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsExhibitNumber Exhibit10.14 First Incremental Term Loan Assumption Agreement, by and among Enviva Partners, LP, certain subsidiaries ofEnviva Partners, LP, as Guarantors, the Lenders party thereto, and Barclays Bank PLC, as administrative agent,dated as of December 11, 2015, (Exhibit 10.1, Form 8‑K filed December 17, 2015, File No. 001‑37363)10.15† Form of Assignment, Assumption and Amendment Agreement (relating to employment agreements)(Exhibit 10.19, Form S‑1 Registration Statement filed April 3, 2015, File No. 333‑199625)10.16 Second Amended and Restated Employment Agreement between Edward R. Smith and Enviva ManagementCompany, LLC, dated August 19, 2016 (Exhibit 10.1, Form 8‑K filed August 25, 2016, File No. 001‑37363)10.17 First Amended and Restated Employment Agreement between John K. Keppler and Enviva ManagementCompany, LLC, dated December 1, 2016 (Exhibit 10.1, Form 8‑K filed December 1, 2016, File No. 001‑37363)10.18 Second Amendment to Credit Agreement and First Amendment to Guarantee and Collateral Agreement, dated asof October 17, 2016, by and among Enviva Partners, LP, as borrower, certain subsidiaries of Enviva Partners, LP,as guarantors, the lenders party thereto, the increasing revolving lenders party thereto and Barclays Bank PLC,as administrative agent and collateral agent (Exhibit 10.2, Form 8‑K filed October 24, 2016, FileNo. 001‑37363)10.19 Biomass Supply Agreement between Enviva Partners, LP and Enviva Wilmington Holdings, LLC, datedJanuary 22, 2016 (Exhibit 10.22, Form 10‑K filed March 8, 2016, File No. 001‑37363)10.20* Terminal Services Agreement between Enviva, LP and Enviva Port of Wilmington, LLC, dated December 14,201621.1* List of Subsidiaries of Enviva Partners, LP23.1* Consent of KPMG LLP24.1* Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10‑K)31.1* Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 200231.2* Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 200232.1** Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes‑Oxley Act of 200232.2** Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002101.INS XBRL Instance Document101.SCH XBRL Schema Document101.CAL XBRL Calculation Linkbase Document101.DEF XBRL Definition Linkbase Document101.LAB XBRL Labels Linkbase Document.101.PRE XBRL Presentation Linkbase Document* Filed herewith.** Furnished herewith.† Management Contract or Compensatory Plan or Arrangement155 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of Contents SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, hereunto duly authorized. ENVIVA PARTNERS, LP By:Enviva Partners GP, LLC, its general partner Date: February 22, 2018By:/s/ John K. Keppler John K. Keppler Title: Chairman, President and Chief Executive Officer 156 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Table of ContentsPOWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes andappoints each of William H. Schmidt, Jr. and Stephen F. Reeves as his true and lawful attorney‑in‑fact and agent with fullpower of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any andall amendments to this Annual Report, and to file the same, with all exhibits thereto and other documents in connectiontherewith, with the Securities and Exchange Commission, granting unto said attorneys‑in‑fact and agents, and each of them,full power and authority to do and perform each and every act and thing requisite and necessary to be done in connectiontherewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that saidattorneys‑in‑fact and agents, and each of them, or their or his substitute or substitutes, may lawfully do or cause to be done byvirtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on the dates indicated.Name Title Date /s/ JOHN K. KEPPLER Chairman, President and Chief Executive Officer(Principal Executive Officer) February 22, 2018John K. Keppler /s/ STEPHEN F. REEVES Executive Vice President and Chief FinancialOfficer (Principal Financial Officer) February 22, 2018Stephen F. Reeves /s/ JAMES P. GERAGHTY Vice President and Controller (PrincipalAccounting Officer) February 22, 2018James P. Geraghty /s/ MICHAEL B. HOFFMAN Director February 22, 2018Michael B. Hoffman /s/ RALPH ALEXANDER Director February 22, 2018Ralph Alexander /s/ CARL L. WILLIAMS Director February 22, 2018Carl L. Williams /s/ ROBIN J. A. DUGGAN Director February 22, 2018Robin J. A. Duggan /s/ JOHN C. BUMGARNER, JR. Director February 22, 2018John C. Bumgarner, Jr. /s/ WILLIAM K. REILLY Director February 22, 2018William K. Reilly /s/ JANET S. WONG Director February 22, 2018Janet S. Wong /s/ CHRISTOPHER B. HUNT Director February 22, 2018Christopher B. Hunt /s/ GARY L. WHITLOCK Director February 22, 2018Gary L. Whitlock 157Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 10.20EXECUTION VERSIONTERMINAL SERVICES AGREEMENTby and betweenENVIVA PORT OF WILMINGTON, LLCandENVIVA, LPDated: December 14, 2016 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TABLE OF CONTENTSSection 1.Definitions1 Section 2.Term6 Section 3.Terminal Services; Shipment Commitment63.1Terminal Services63.2Shipment Commitment6 Section 4.Fees; Invoices and Payments64.1Terminal Services Fee; Included Services64.2Payment of Terminal Services Fee; Escalation74.3Taxes and Other Charges74.4Monthly Statements and Invoices84.5Payment of Fees84.6Records and Audits84.7Inventory Accounting84.8Shrinkage9 Section 5.Operations; Deliveries; Loading95.1Inbound Railcar Deliveries95.2Inbound Truck Deliveries95.3Use of Berth105.4Notification of Arrival of Vessels105.5Vessels105.6Demurrage105.7Compliance115.8Filings, Disclosure and Reports115.9Berth Operating Hours115.10Terminal Maintenance115.11Credentials115.12Minimum Rate of Loading Requirements; Despatch115.13Limitation of Services125.14Required Improvements125.15Ownership of Equipment125.16Title12 Section 6.Biomass Quality Standards; Measurement126.1Quality Requirements126.2Deliveries Not Meeting Quality Requirements136.3Commingling136.4Biomass Loss or Damage136.5Measurement14 - i - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Section 7.Consequential Damages Waiver14 Section 8.Force Majeure Event148.1General148.2Notice148.3Make-up158.4Termination15 Section 9.Inspection of and Access to Terminal159.1Inspections159.2Nature of Access Right15 Section 10.Assignment1610.1Assignment Generally1610.2Permitted Assignments16 Section 11.Compliance with Law and Safety16 Section 12.Default, Termination and Other Remedies1712.1Customer Default1712.2Owner Remedies for Customer Default1712.3Owner Default1712.4Customer Remedies for Owner Default1812.5Remedies of Each Party Generally1812.6Lien on Biomass18 Section 13.Insurance1913.1Customer’s Required Insurance1913.2Customer Certificates of Insurance; Notification of Changes or Lapse1913.3Owner’s Required Insurance1913.4Owner Certificates of Insurance; Notification of Changes or Lapse2013.5Reports of Accidents and Injuries2013.6Application of Insurance Proceeds20 Section 14.Indemnity and Liability2014.1Indemnification of Customer Group2014.2Indemnification of Owner Group2114.3Notice; Procedure21 Section 15.Other Representations, Warranties and Covenants21 Section 16.Miscellaneous2216.1Notices2216.2Interpretation2316.3Amendment2316.4Severability of Provisions2316.5Entire Agreement2416.6Counterparts; Electronic Signatures24 - ii - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 16.7Third Parties2416.8Non-Recourse2416.9Attorneys’ Fees2416.10No Waiver2416.11No Agency2416.12Governing Law2416.13Dispute Resolution25 Section 17.Confidentiality2517.1Confidentiality2517.2Confidentiality Carve-outs2617.3Securities Filings2617.4Press Releases26 Exhibit A COMMERCIAL DETAILSA-1 Exhibit B MARINE NOMINATIONS AND SCHEDULINGB-1 Exhibit C SPECIFICATIONSC-1 - iii - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. TERMINAL SERVICES AGREEMENTThis Terminal Services Agreement (this “Agreement”) is made effective this 14th day of December, 2016(“Effective Date”) by and between Enviva Port of Wilmington, LLC, a Delaware limited liability company (“Owner”),and Enviva, LP, a Delaware limited partnership (“Customer”), sometimes referred to individually as “Party” andcollectively as “Parties.” In consideration of the mutual promises contained in this Agreement, the Parties agree to thefollowing terms and conditions relating to the provision of marine terminal services related to the Biomass (ashereinafter defined).RECITALSA. Owner operates a wood pellet export facility located within the marine terminal under the jurisdiction ofthe North Carolina State Ports Authority (the “Port Authority”) in Wilmington, North Carolina (the “Terminal”) for thereceipt, discharge and loading of Biomass for export by ocean-going vessel.B. Customer is in the business of processing, purchasing and selling Biomass.C. Owner and Customer desire to enter into this Agreement to memorialize the terms and conditionswhereby Customer will deliver, or cause to be delivered, Biomass to the Terminal for the receipt, discharge andloading for export by ocean-going vessels, and Owner will provide such services for Customer, on and subject to theterms and conditions of this Agreement.NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, and intending to be legally bound, Owner and Customer agree as follows:AGREEMENTSection 1. Definitions. In this Agreement, unless the context requires otherwise, the terms defined in thepreamble have the meanings indicated and the following terms will have the meanings indicated below:“Affected Party” has the meaning indicated in Section 8.1.“Affiliate” means, with respect to any Person, any other Person that is directly or indirectly controlling,controlled by or under common control with, such Person; provided, that for purposes of this definition, “control”means the possession, directly or indirectly, of the power to direct or cause the direction of the management andpolicies of a Person, whether through the ownership of voting interests, by contract or otherwise, and “controlling”,“controlled by” and “under common control with” have corresponding meanings.“Agent” means any contractor, agent, employee or other representative accessing the Terminal in connectionwith this Agreement on behalf of, at the request of or for the benefit of Customer. Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Bankrupt” means with respect to any Person, such Person (a) files a petition or otherwise commences,authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency,reorganization or similar Law; (b) has any such petition, action or proceeding filed or commenced against it and suchpetition, action or proceeding is not stayed or dismissed within sixty (60) Days after filing; (c) makes an assignment orany general arrangement for the benefit of creditors; (d) otherwise becomes insolvent; (e) has a liquidator,administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion ofits property or assets; or (f) is generally unable to pay its debts as they become due.“Base Index” has the meaning indicated in Section 4.2(b).“Berth” has the meaning set forth in the Operation and Services Agreement.“Biomass” means free-flowing wood pellets comprised of wood fiber from pulpwood, timber harvestbyproducts, and industrial residuals.“Business Day” means any Day that is not a Saturday, a Sunday or any other Day on which banks in the Stateof New York are permitted to close.“Charter” means a contract whereby an owner or operator of a Vessel contracts with Customer for thetransportation of one or more Shipments.“Claims” means claims, demands, suits, or causes of action, whether at law or in equity, and whether based onstatute, regulation, rule, ordinance, code or standard or on theories of contract, tort, strict liability or otherwise.“Collateral” has the meaning indicated in Section 12.6(a).“Confidential Information” has the meaning indicated in Section 17.1.“Contract Year” means each twelve (12) month period commencing on January 1; provided, that the firstContract Year shall begin on the Effective Date and end on December 31, 2016.“Current Index” has the meaning indicated in Section 4.2(b).“Customer Event of Default” has the meaning indicated in Section 12.“Customer Group” means, collectively, Customer, its parents and Affiliates, its Agents, and its and theirrespective managing members, general and limited partners, officers, directors, employees, and other representatives.“Customer Notice of Termination” has the meaning indicated in Section 12.4.“Days” means the consecutive twenty-four (24) hour period beginning at the start of the hour ending 01:00Eastern prevailing time on any calendar day and ending at the completion of the hour ending 24:00 Eastern prevailingtime on such calendar day.- 2 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Default Interest Rate” means, for any date, the lesser of (i) a per month rate of interest equal to one and one-half percent (1.5%) and (ii) the maximum rate permitted by Law.“Delivery Point” means, with respect to any delivery of Biomass by rail, the railcar unloading facility at theTerminal or, with respect to any delivery of Biomass by truck, Owner’s truck scale at the Terminal.“Domes” means each of the concrete structures at the Terminal used to protect Biomass pending its beingloaded onto Vessels for transportation from the Terminal in accordance herewith.“Event of Default” means either a Customer Event of Default or an Owner Event of Default, as applicable.“Excluded Period” has the meaning indicated in Section 5.12.“FIFO” means the First-In-First-Out method for costing inventory, which method assumes that the firstBiomass placed in inventory in a Dome is the first Biomass unloaded from such Dome.“Financing Party” means any and all banks or other providers of capital to Owner or Customer.“FOB” means “FOB” or “Free on Board” as defined in Incoterms 2010 as published by the InternationalChamber of Commerce.“Force Majeure Event” has the meaning set forth in Section 8.1.“Good Industry Practices” means using the standards, practices, methods and procedures and exercising thedegree of skill, care, diligence, prudence and foresight that would be expected to be observed by a skilled andexperienced operator in carrying out activities the same as or similar to the Terminal Services under the same or similarcircumstances as those contemplated by this Agreement.“Governmental Entity” means any national, regional, state, provincial, municipal or local authority (includingthe Port Authority), department, body, board, instrumentality, commission, corporation, branch, directorate, agency,ministry, court, tribunal, judicial authority, legislative body, administrative body, regulatory body, autonomous orquasi-autonomous entity or taxing authority or any political subdivision of any of the foregoing and any Person(whether autonomous or not) exercising executive, legislative, judicial, regulatory or administrative functions of orpertaining to any of the foregoing entities, having jurisdiction over the Person or matter in question.“Indemnified Party” has the meaning indicated in Section 14.3.“Indemnifying Party” has the meaning indicated in Section 14.3.“Index” has the meaning indicated in Section 4.2(b).“Indirect Taxes” has the meaning indicated in Section 4.3.- 3 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Interest Rate” means, for any date, the lesser of (i) the per annum rate of interest equal to the prime lendingrate as may from time to time be published in The Wall Street Journal under “Money Rates” on such Day (or if notpublished on such Day on the most recent preceding Day on which published), plus one percent (1%) and (ii) themaximum rate permitted by Law.“Laws” means all statutes, laws, ordinances, rules, regulations, permits, authorizations, codes, decrees,judgments, proclamations, injunctions, constitutions, decisions, orders and directives of the applicable GovernmentalEntity, in each case applicable to the relevant Party, the Terminal Services, the Terminal, the Berth or the location ofthe performance of the obligations hereunder.“Laycan” means the defined period during which Customer must tender a Notice of Readiness to Owner thatthe Vessel has arrived at the anchorage or customary place of waiting and is in all regards ready to commence loading.“Losses” means any and all losses, liabilities, fines, penalties, damages, costs and injuries, including the costs ofsettlements, litigation, arbitration, judgments and expenses and documented attorneys’ fees (including documentedattorneys’ fees and litigation expenses in establishing the right to indemnity hereunder).“Market Price” means, for purposes of Section 6.4, at the sole option and risk of Customer, either (a) thereasonable and documented price actually paid or received by Customer to procure or sell, as the case may be, woodpellets of similar quality and quantity; or (b) the market price for the relevant date as determined by averaging themarket prices from the relevant market indices for wood pellets of similar quality delivered CIF to Antwerp, Belgium,or Rotterdam or Amsterdam, Netherlands, with equitable adjustments to such indices to conform to this Agreement,including by eliminating the built-in cost components of such indices inapplicable to the relevant Biomass, includingoceangoing freight costs, loading and storage costs, and truck or rail freight costs, as applicable. An index must exhibita minimum liquidity threshold as determined by completion of at least four (4) transactions of at least twenty-fivethousand (25,000) MT per week to be used in determining the Market Price. Where there are not at least two (2)relevant indices for the relevant date or where wood pellets of similar quality are not available in the market, the marketprice may be determined or augmented, as the case may be, based upon the price at which Customer would be able tosell or purchase, as the case may be, the quantity of wood pellets in the market acting in a reasonable manner asdetermined by taking the average of price quotations for wood pellets of similar quality and quantity as of the relevantdate from at least two (2) and no more than three (3) independent internationally recognized dealers/brokers orcounterparties (such dealers/brokers or counterparties to be appointed by Customer). “Master” means the captain of the relevant Vessel.“Month” means each full calendar month during the Term of this Agreement.“Non-Affected Party” has the meaning indicated in Section 8.1.“Notice of Readiness” or “NOR” means a notice of readiness tendered by a Master confirming a Vessel’sarrival at the anchorage or customary place of waiting and readiness to load cargo.- 4 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Office Hours” means the period between 09:00 and 17:00 hours Eastern prevailing time on a Business Day.“Operation and Services Agreement” means the Operation and Services Agreement, dated as of September 12,2013, by and between the Port Authority and Owner (as assignee of Enviva Holdings, LP).“Owner Event of Default” has the meaning indicated in Section 12.“Owner Group” means, collectively, Owner, its parents and Affiliates, and its and their respective managingmembers, general and limited partners, officers, directors, employees, agents, and other representatives, includingEnviva Management Company, LLC in its capacity as the contract operator of Owner’s assets.“Owner Notice of Termination” has the meaning indicated in Section 12.2.“Person” means any natural person, trustee, corporation, general partnership, limited partnership, limitedliability company, joint stock company, trust, unincorporated organization, bank, business association, firm, jointventure, Governmental Entity, company or other entity.“Port Authority” has the meaning set forth in the recitals.“Railroad” means any common rail carrier with lines and track providing inbound railroad transportation to theTerminal, including CSX Transportation, Inc. and the Wilmington Terminal Railroad, Limited Partnership, a short linefreight railroad.“Required Vessel Specifications” has the meaning indicated in Section 5.5.“Rules” has the meaning indicated in Section 16.13.“Shipment” means a consignment of Biomass loaded onto Vessel(s).“Source Plants” means the wood pellet biomass production facility located in Sampson County, North Carolinaand the wood pellet biomass production facility located in Hamlet, North Carolina, in each case, to the extent suchfacility is then owned and operated by Customer or one of its Subsidiaries. “Specifications” has the meaning indicated in Section 3.1.“Subsidiary” means, with respect to any Person, any Person that is controlled by such Person. As used in thisdefinition, “control” and its derivatives with respect to any Person mean the possession, directly or indirectly, of thepower to direct or cause the direction of the management and policies of such Person, whether through the ownershipof voting interests, by contract or otherwise.“Super Holidays” has the meaning indicated in Section 5.9.“Term” has the meaning indicated in Section 2.- 5 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. “Terminal” has the meaning set forth in the recitals.“Terminal Services” has the meaning indicated in Section 3.1.“Terminal Services Fee” has the meaning indicated in Section 4.1.“Vessel” means any bulk carrier or barge (including any attending tug or towboat), or other watercraft that iscapable of receiving Biomass at the Terminal on behalf of, at the request of, or for the benefit of Customer.“Weather Working Day” means a day for which vessel operations is normally conducted at a port without theinterference of inclement weather.Section 2. Term. This Agreement is effective from the Effective Date, and shall continue in full force andeffect until the termination of the Operation and Services Agreement (the “Term”), unless earlier terminated inaccordance with the express provisions of this Agreement. This Agreement shall terminate automatically at such time(if any) at which Customer ceases to own any interest in, directly or indirectly, any Source Plant.Section 3. Terminal Services; Shipment Commitment.3.1 Terminal Services. Owner will make its loading and unloading facilities at the Terminal available forthe receipt and handling of Biomass that conforms to the specifications and sustainability criteria set forth on Exhibit C(collectively, the “Specifications”). Owner may allocate use of the Terminal facilities among its customers, includingAffiliates, at its discretion, which it shall exercise in a reasonable manner. Subject to Owner’s rights to suspendhereunder in accordance with Exhibit B hereto, Owner agrees to perform the following services for Customer at theTerminal: (i) coordination of inbound Biomass-loaded railcars and trucks to, and the outbound dispatch of railcars andcoordination of outbound trucks from, the Terminal; (ii) receipt of Biomass by railcar or truck at the Delivery Point,(iii) the temporary receipt, storage, and handling of Biomass at the Terminal in connection with the offloading ofrailcars and trucks and pending the redelivery of same onto Vessels designated by Customer; (iv) the re-delivering andloading of Biomass at the Berth onto Vessels designated by Customer; (v) such regulatory compliance reporting thatOwner is required to perform as the Terminal operator; and (vi) such other services, including those set forth in ExhibitB hereto, expressly set forth herein (collectively, the “Terminal Services”). All Terminal Services performed hereunderby Owner shall be performed in a commercially reasonable manner consistent with Good Industry Practices and incompliance with Laws. For the avoidance of doubt, Terminal Services shall not include making arrangements for thetransportation of Biomass by Vessel, for which, as between the Parties, Customer shall be solely responsible to make atits own cost.- 6 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 3.2 Shipment Commitment. Customer shall cause all Biomass produced from the Source Plant(s) to bedelivered into the Terminal.Section 4. Fees; Invoices and Payments.4.1 Terminal Services Fee; Included Services. The fee for Terminal Services shall be invoiced at $14.00per metric ton of Customer’s Biomass that is received by Owner at the Delivery Point (such fee, as discounted orescalated in accordance with Section 4.2(b), the “Terminal Services Fee”). Each of Owner and Customer herebyacknowledges and agrees that, except as expressly set forth in this Section 4.1, the Terminal Services Fee constitutespayment for all Terminal Services. Notwithstanding the foregoing, Customer or its Agents, as applicable, shall beobligated to pay all additional dockage and security fees imposed by the Port Authority in connection with the use ofthe Terminal or the Berth by any Vessel, as the same are incurred by Customer or its Agents, as applicable. TheTerminal and the Berth are within the jurisdiction of the Port Authority. Customer and its Vessels may be subject tothe applicable rules and fees issued by the Port Authority, including any of its tariffs, as same may be amended orrevised from time to time. Accordingly, Customer and its Vessel are subject to any such applicable rules issued andfees required by the Port Authority, independent and apart from, and in addition to, Customer’s obligations to Ownerunder this Agreement.4.2 Payment of Terminal Services Fee; Escalation.(a) Customer agrees to utilize, or pay for, the Terminal Services as contemplated by this Agreementas outlined in this Section 4.2.(b) The Terminal Services Fee will automatically adjust annually, beginning on January 1, 2015,and on January 1 of each year thereafter, to reflect the rate of increase, if any, in the Chained Consumer Price Index forAll Urban Consumers (C-CPI-U), all items, U.S. city average, as published by the Bureau of Labor Statistics (the“Index”), and the Terminal Services Fee as so adjusted shall in each case be effective for the subsequent twelve (12)month period; provided, however that the Terminal Services Fee for the twenty-four (24) month period beginning onthe Effective Date shall be discounted by $4 per metric ton of Customer’s Biomass that is received by Owner at theDelivery Point during such period. For purposes of such adjustments, the “Base Index” shall be the Index for themonth immediately preceding the month in which the Effective Date occurs and the “Current Index” shall be the Indexfor the last month of the prior Contract Year. The percentage change from the Base Index to the Current Index will becalculated to the third decimal place and applied to the Terminal Services Fee to determine the change to the TerminalServices Fee in accordance with the following formula; provided, that in no event shall the operation of this Section4.2(b) result in a reduction in any charges applicable during any period beginning on or after January 1, 2015 ascompared with the charges that were applicable at any time prior to such period:- 7 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. ((Current Index - Base Index)/Base Index) * Terminal Services Fee = Change to Terminal Services FeeIn the event the Bureau of Labor Statistics no longer keeps or publishes the Index, the Parties agree to establish analternative method of adjusting the Terminal Services Fee based on a currently published U.S. Government index thatreflects changes in the prices paid by urban consumers for a representative basket of goods and services.4.3 Taxes and Other Charges. In consideration of Owner’s agreement to provide Terminal Services toCustomer hereunder, in addition to the other amounts owed to Owner hereunder, Customer shall be responsible for,and shall indemnify, defend and hold harmless Owner against, all taxes, assessments and fees, including ad valoremtaxes, now or in the future assessed against the Biomass and the provision of Terminal Services, including any salesand use tax (collectively, “Indirect Taxes”). Customer further agrees to provide proper documentation for all claimedexemptions to Indirect Taxes.4.4 Monthly Statements and Invoices. Within ten (10) Days following the end of each Month during theTerm of this Agreement, Owner will submit to Customer a statement recording the volume of Customer’s Biomassreceived at the Delivery Point during the preceding Month, together with an invoice for the Terminal Services Fee andIndirect Taxes for the preceding Month. This Monthly statement and invoice will be mailed or sent by facsimile toCustomer at the address indicated in Exhibit A. Each such Monthly statement will include, in addition to the identityand volume of Biomass, (i) a consecutive number, (ii) date of issuance, and (iii) a reference to the rate of TerminalServices Fee included in this Agreement.4.5 Payment of Fees. The Terminal Services Fee and Indirect Taxes reflected in Owner’s invoices are dueand payable within ten (10) Business Days after the date of receipt of Owner’s invoice by Customer. A Party may, ingood faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement, oradjust any invoice for any arithmetic or computational error. Neither Party may dispute or adjust any invoice deliveredmore than twelve (12) months from the date of delivery of such invoice. In the event an invoice or portion thereof, orany other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall berequired to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basisfor the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Uponresolution of the dispute, any required payment shall be made within five (5) Business Days after such resolution alongwith interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Anyoverpayments shall, at the option of the Party making the overpayment, be returned upon request or deducted by theParty receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from andincluding the date of such overpayment to but excluding the date repaid or deducted by the Party receiving suchoverpayment. Any dispute with respect to an invoice is- 8 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. waived unless the other Party is timely notified of such dispute in accordance with this Section 4.5. Any overdueamount hereunder not disputed in good faith in accordance with this Section 4.5 shall bear interest at the DefaultInterest Rate from and including the date due to but excluding the date paid.4.6 Records and Audits. During the Term and for up to one (1) year after the end of the Term, Customermay, at its own expense, during Office Hours and upon reasonable advance notice so as to not unreasonably interferewith the Terminal’s or Owner’s normal business operations, inspect, copy and audit, to the extent each of the followingis relevant to Owner’s obligations hereunder, Owner’s books, records, accounts, ledgers, schedules, correspondenceand any other documents. Customer shall reimburse reasonable and documented out-of-pocket costs incurred byOwner in connection with this Section 4.6. Owner shall reasonably cooperate with Customer and shall provide suchinformation as may be reasonably requested by Customer under this Section 4.6.4.7 Inventory Accounting. The Parties agree to follow Owner’s inventory accounting policies on a perDome basis with respect to FOB deliveries of Biomass terminaled hereunder to any customers of Customer, whichmay vary by Dome and shall be FIFO unless Customer is notified otherwise.4.8 Shrinkage. Given the nature of terminal operations and the varying temperatures, Vessel configurationsand other factors affecting the volume and other attributes of Biomass as it is offloaded from railcars and trucks,handled through the Terminal, and subsequently loaded onto Vessels, Customer agrees that the Biomass will be subjectto shrinkage. Following Customer’s request for such calculation to the extent commercially reasonable and in anyevent at least once per Contract Year, Owner shall calculate the total rate of shrinkage of all Biomass in storage sincethe last such measurement was taken for purposes of this Agreement. Such calculation shall be made by dividing thetonnage loaded onto Vessels since the last such measurement was taken for purposes of this Agreement by the weightof all deliveries of Biomass by railcar and truck to the Delivery Point during the same period as measured upon arrivalof such railcars and trucks. Customer shall bear its pro rata portion of any shrinkage based upon the weight of itsShipments during each such calculation period; provided, that Owner shall bear the risk of any shrinkage in excess ofone percent (1.0%) of the weight of all deliveries of Biomass to the Delivery Point.- 9 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Section 5. Operations; Deliveries; Loading.5.1 Inbound Railcar Deliveries.(a) Customer understands and agrees that Owner has no control over the performance of theRailroad, including, but not limited to, railcar switching frequency, and that Owner shall not be responsible for thesame.(b) Owner guarantees to Customer a minimum available railcar unloading rate at the Terminal of400 metric tons per hour, Weather Working Day, Saturdays, Sundays, Holidays included (WWDSSHINC), excludingSuper Holidays and subject to the Railroad’s frequency of switching and Force Majeure Events.(c) Prior to railcars being picked up by the Railroad, Customer shall provide electronically, via aMicrosoft Excel spreadsheet or other reasonably acceptable format, to Owner the railcar identification number and thecorresponding empty weight, full weight, and volume for each railcar unloaded.(d) Owner will be under no obligation to make any arrangements with, or pay any fees to, theRailroad with respect to the transportation of railcars to or from the Terminal. Customer will be solely responsible formaking arrangements with, entering into any necessary agreement with, and the payment for any services due to theRailroad with respect to the transportation of railcars to and from the Terminal. Customer will issue orders pertainingto railcars to both the Railroad and Owner simultaneously.5.2 Inbound Truck Deliveries.(a) Customer understands and agrees that Owner has no control over the performance of anytrucking company delivering Biomass to the Terminal and that Owner shall not be responsible for the same.(b) Owner guarantees to Customer a minimum truck unloading rate at the Terminal of 300 metrictons per hour, Weather Working Day, Saturdays, Sundays, Holidays included (WWDSSHINC), excluding SuperHolidays and subject to Force Majeure Events.(c) Owner will be under no obligation to make any arrangements with, or pay any fees to, anytrucking company or otherwise with respect to the transportation of trucks to or from the Terminal. Customer will besolely responsible for making arrangements with, entering into any necessary agreement with, and the payment for anyservices due to trucking companies with respect to the transportation of trucks to and from the Terminal. Owner shallprovide a safe weighing and unloading area and use commercially reasonable efforts to maintain an efficient trafficflow at the Delivery Point.- 10 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (d) Owner shall ensure that its truck weighing scales at the Delivery Point have been certified noless frequently than once every twelve (12) months in accordance with applicable Laws and that any operators ofOwner’s scales are bonded weight masters.5.3 Use of Berth. Customer shall have non-exclusive use of the Berth from and after the Effective Datethroughout the Term. Owner shall use due diligence to make the Berth safe and capable of accommodating Vesselswith mean draft, maximum length overall and maximum beam consistent with the Berth’s dimensions and depths;provided, however, that in the event of severe weather conditions, Owner’s obligation to make the Berth available toCustomer shall be limited in accordance with Good Industry Practice and applicable Laws.5.4 Notification of Arrival of Vessels. Customer must provide Owner with and maintain updated forecastsof scheduled arrivals of its Vessels at the Terminal, which forecasts must include details as to the quantity of Biomassto be loaded aboard such Vessels. Customer must notify Owner of tentative Biomass Vessel loading dates reasonablyin advance of anticipated Vessel loadings and of any revision of those dates as soon as practicable.5.5 Vessels. Customer shall nominate Vessels to load Biomass only if they fully comply with (or holdnecessary waivers from) all applicable requirements of Law and comply with the requirements set forth in Exhibit A(the “Required Vessel Specifications”). Each Vessel scheduled to load Biomass at the Berth must satisfy therequirements of the Required Vessel Specifications; provided, that Owner shall accept or reject any Vessel within one(1) Business Day of receiving such nomination and any other information required by the Required VesselSpecifications; and provided further, that Owner’s acceptance of such Vessel shall not be unreasonably withheld. Inaddition, Owner may screen any Vessel scheduled for loading at the Berth to ensure such Vessel is in compliance withthe Required Vessel Specifications. Customer shall indemnify Owner in accordance with Section 14.2 for any loss,cost or damage resulting from failure to comply with any of the Required Vessel Specifications. Owner shall have theright to refuse to berth any Vessel or to order any Vessel to vacate the Berth if the presence or condition of any suchVessel, its cargo or its crew shall in Owner’s reasonable opinion threaten the safety of, or pose a hazard to, theTerminal, the Berth or the area surrounding the same or any Person or property thereon; provided, that Owner shallprovide Customer written notice of any such refusal.5.6 Demurrage. In the event that demurrage is payable to the applicable owner or operator of any Vessel,pursuant to the applicable Charter, and such demurrage is attributable solely to delay caused by Owner’s breach of itsobligations pursuant to Section 5.12 of this Agreement, then Owner shall reimburse Customer for the amount of suchdemurrage paid to the applicable owner or operator with respect to the delayed Vessel; provided, that the cost ofdemurrage shall not exceed $15,000 per day. In all other cases, Customer shall be responsible for and shall paydemurrage to the applicable owner or operator of any Vessel in connection with this Agreement.- 11 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 5.7 Compliance. Customer will provide Owner with any information, documentation, or other materials asrequired by Law for the unloading or loading of Biomass.5.8 Filings, Disclosure and Reports. Each Party acknowledges that the other Party may have an obligationunder Law to disclose information regarding Biomass to Governmental Authorities, parties handling Biomass, partiesexposed to Biomass, and to the general public, and each Party will promptly upon the request of any such obligatedParty provide such Party with any information required by Law for such disclosures. Each Party will prepare, file andmaintain copies of all reports required by Law to be filed with any federal, state or local Governmental Entityconcerning such Party’s activities under this Agreement and each Party will promptly provide a copy of any suchreports to the other Party upon request.5.9 Berth Operating Hours. The Berth shall be in operation for the loading of Biomass twenty-four (24)hours a Day, seven (7) Days a week, and every Day during the applicable year, except on Christmas Day,Thanksgiving Day, Labor Day, Independence Day, and New Year’s Day (collectively, “Super Holidays”). Subject tothe terms and conditions of Section 5.10, Owner may take the Berth, or any portion or part thereof, out of serviceduring the Term in order to perform routine dredging, restoration, inspections, maintenance or repairs.5.10 Terminal Maintenance. Owner may take any facility or equipment at the Terminal, or any portion orpart thereof, out of service during the Term in order to perform inspections, maintenance, or repairs. Except for anyemergency in which providing advance notice is not practicable, Owner will provide Customer with at least thirty-five(35) days prior written notice of any such scheduled maintenance that may impact any Terminal Serviceshereunder. On or before December 1st of each year during the remaining term following the Effective Date, Ownerwill provide Customer a non-binding schedule reflecting planned maintenance for the upcoming calendar year andshall provide Customer updates from time to time based on any changes to such schedule.5.11 Credentials. Owner will require each of Customer’s carriers and contractors to execute an accessagreement and, if applicable, require each employee or invitee of any such carrier or contractor to produce a validTransportation Worker Identification Credential (TWIC) card to the extent required under Law prior to entering theTerminal and unloading or loading Biomass.5.12 Minimum Rate of Loading Requirements; Despatch. Owner will provide equipment and facilitiesreasonably necessary for the loading of Biomass at the minimum rate of 18,000 metric tons per Weather Working Day,Saturdays, Sundays, Holidays included (WWDSSHINC), excluding Super Holidays (or such other loading- 12 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. rate as may be otherwise agreed to in writing by the Parties), subject to any Vessel limitations, and, in addition,excluding the following periods: the time taken from anchorage to the discharge berth(s), the time taken for ballastingor deballasting unless discharge is possible while maintaining the stipulated minimum rate, the time lost due to anycause attributable to the Vessel, her master, her crew or owners, that affects the working or berthing of the Vessel, theperiod of delay caused by any Force Majeure Event(s), any weather related delay affecting the safe loading of theBiomass in a dry condition as required, the period of stoppage of loading activities by stevedores due to strike, timetaken due to disputes between master and men occasioning a stoppage of stevedores, Vessel crew, pilots or otherworkmen essential to the movement, working or unloading of the Vessel or the period of physical inability by theVessel to load the cargo, including but not limited to ballasting or deballasting capacity, and each period during whichsuch minimum rate cannot be maintained due to (i) Customer’s Biomass failing to meet the Specifications, (ii)Customer’s failure to deliver sufficient volumes of Biomass, or (iii) any action or omission of Customer or any thirdparty not within Owner’s control (each such excluded period, including Super Holidays, an “Excluded Period”). IfOwner’s actual loading rate is less than such applicable minimum rate during any Excluded Period or as a result ofVessel limitations, then, in such event, Owner will have no liability for demurrage. Customer shall be liable to payOwner for despatch at a per diem rate (or pro-rated portion thereof) equal to fifty percent (50%) of the demurrage rateapplicable to the applicable Vessel in the event that Owner loads (or causes the loading of) Biomass onto a Vessel at arate greater than 18,000 metric tons per Weather Working Day, Saturdays, Sundays, Holidays included(WWDSSHINC), excluding Super Holidays (or such other loading rate as may be otherwise agreed to in writing bythe Parties), subject to any Vessel limitations and excluding Excluded Periods. For the avoidance of doubt, suchdespatch payment obligations shall accrue to the extent such minimum rate is exceeded even if the related loadingoccurs (at Owner’s sole discretion) during any Excluded Period.5.13 Limitation of Services. The Terminal Services hereunder are being provided to Customer only withrespect to the Biomass and no other products.5.14 Required Improvements. Owner shall perform routine maintenance and repair of the Terminal inaccordance with Good Industry Practices, but will not be required to make any improvements, alterations or additionsto the Terminal.5.15 Ownership of Equipment. All fixtures, equipment and appurtenances attached to the Terminal are andshall remain the property of Owner or the Port Authority, as applicable.5.16 Title. Subject to Section 12.6, title to the Biomass handled hereunder shall always remain withCustomer. Notwithstanding anything to the contrary herein, title to the Biomass shall in no event pass to Owner at anytime under or pursuant to this Agreement. Owner shall be deemed to have custody of the Biomass from the time itpasses from the delivery facilities of the railcars or trucks- 13 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. into Owner’s receiving facilities and until it passes from the delivery facilities of Owner into the receiving facilities of aVessel.Section 6. Biomass Quality Standards; Measurement.6.1 Quality Requirements. Customer represents and warrants to Owner that all Biomass tendered by or forthe account of Customer for Terminal Services will conform to the Specifications. Owner will not be obligated to loador unload Biomass that fails to meet the Specifications at the time tendered by Customer, but, to the extent that Ownerloads or unloads Biomass that fails to meet the Specifications, in no event will Owner have any liability whatsoever forloading or unloading such Biomass. Owner may, upon prior written notice to Customer, impose other limitations onthe Biomass delivered to the Terminal in order to (a) comply with applicable Laws, (b) protect health and safety, and(c) protect the premises, equipment or facilities at the Terminal.6.2 Deliveries Not Meeting Quality Requirements. Owner may rely upon the representations of Customerset forth below as to Biomass quality. In the event that Customer knows, or has reason to believe, that any Biomasstendered to Owner does not conform with the Specifications when tendered, it shall be the responsibility of Customerto notify Owner to such effect as soon as reasonably possible, whereupon Owner may elect to refuse tender, or, ifOwner has already received such Biomass into the Terminal, cause Customer to take redelivery or otherwise dispose ofthe nonconforming Biomass, at Customer’s expense. Owner shall also have the right, without prejudice to any otherremedy available to Owner, to reject and return to Customer any quantities of Biomass that fail to meet theSpecifications, even after receipt by Owner. Notwithstanding anything in this Agreement to the contrary, Customershall be responsible for, and shall indemnify and hold harmless the Owner Group from and against, any Claims,including damage to the biomass of others and all documented costs resulting from any Biomass received at theTerminal for Customer’s account that does not conform to the Specifications.6.3 Commingling. Customer acknowledges and agrees that, in connection with the Terminal Services, itsBiomass may be commingled or intermixed with other, similar biomass at the Terminal within theSpecifications. Owner is not obligated to redeliver the identical Biomass (or Biomass matching any identicalspecifications) delivered by Customer into the Terminal.6.4 Biomass Loss or Damage. Subject to Section 4.8, Owner will not be liable to Customer for anycontamination, damage, degradation, misdelivery or loss of Biomass, unless and only to the extent such contamination,damage, degradation, misdelivery or loss results from Owner’s negligence. If Customer desires to protect any Biomassagainst insurable losses relating to contamination, damage, degradation, misdelivery or loss other than as may beattributable to Owner’s gross- 14 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. negligence, Customer may secure insurance at its own cost and expense. Customer must make any claims againstOwner for such contamination, damage, degradation, misdelivery or loss of Biomass by notice to Owner within ninety(90) Days after the date that Customer becomes aware of such contamination, damage, degradation, misdelivery orloss, and Customer irrevocably waives any claim for which the required notice is not provided within such requiredtime. NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY,OWNER’S LIABILITY ARISING OUT OF CONTAMINATION, DAMAGE, DEGRADATION,MISDELIVERY OR LOSS OF BIOMASS SHALL NEVER IN ANY EVENT EXCEED AN AMOUNTEQUAL TO (i) THE MARKET PRICE OF THE CONTAMINATED, DAMAGED, DEGRADED,MISDELIVERED OR LOST BIOMASS, LESS (ii) THE SALVAGE VALUE, IF ANY, OF THECONTAMINATED, DAMAGED, DEGRADED, MISDELIVERED OR LOST BIOMASS, AND OWNERSHALL NOT IN ANY EVENT BE RESPONSIBLE OR LIABLE FOR ANY CONSEQUENTIALDAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF REVENUES OR LOSS OF BUSINESS,NOR FOR PUNITIVE OR EXEMPLARY DAMAGES, NO MATTER HOW SUCH CONTAMINATION,DAMAGE, DEGRADATION, MISDELIVERY OR LOSS OF BIOMASS SHALL HAVE OCCURRED ORBEEN CAUSED.6.5 Measurement.(a) The weight of each delivery of Biomass shall be determined upon arrival at the Delivery Pointusing scales maintained and operated in accordance with procedures reasonably acceptable to Owner and Customerand professionally certified at intervals of no less than six (6) months to be in conformity with the most current,industry accepted standard.(b) The weight of each Shipment shall be determined upon completion of loading. Customer shallappoint an independent marine surveyor, at its own expense but on behalf of both Parties jointly, to conduct a draftsurvey and to issue a certificate to both Parties certifying the weight of the Shipment. Shipments shall be in cargo lotsof 30,000 metric tons +/-10%, at Customer’s option, or such larger vessel sizes as the Parties may mutually agree inwriting.Section 7. Consequential Damages Waiver. EXCEPT AS OTHERWISE PROVIDED IN THISAGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE UNDER ANY CIRCUMSTANCESTO THE OTHER PARTY FOR SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL, EXEMPLARY ORCONSEQUENTIAL DAMAGES OR LOSSES, INCLUDING LOST PROFITS, LOSS OF BUSINESSOPPORTUNITY OR OTHER SIMILAR DAMAGES RESULTING FROM OR ARISING OUT OF THISAGREEMENT, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISIONOR OTHERWISE (EXCEPT WITH RESPECT TO INDEMNITY OBLIGATIONS FOR THIRD-PARTYCLAIMS AND LOSSES).- 15 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Section 8. Force Majeure Event.8.1 General. A Party is not responsible or liable for any delay or failure in the performance of itsobligations under this Agreement to the extent such performance is prevented by a Force Majeure Event. A “ForceMajeure Event” is any event or circumstance that is beyond the control of, and occurs without the fault or negligenceof, the Party claiming force majeure (the “Affected Party”, and the other Party being the “Non-Affected Party”), thatcould not reasonably have been avoided or overcome, and was not reasonably foreseeable. A Force Majeure Eventmay include the following, to the extent that each satisfies the foregoing requirements: any act of God or the elements,earthquakes, floods, landslides, hurricanes, civil disturbances, sabotage, acts of public enemies, terrorism, war,blockades, insurrections, riots, epidemics, fires or explosions. For the avoidance of doubt, a lack of funds, changes inmarket conditions, loss of markets, changes in market pricing, changes in Laws, or the availability of subsidies orinefficiencies in operations shall not constitute a Force Majeure Event.8.2 Notice. The Affected Party shall give the Non-Affected Party written notice within five (5) Days of thedate on which the Affected Party becomes aware of the occurrence of a Force Majeure Event, describing theparticulars and estimated duration of the Force Majeure Event and the proposed cure; provided, however, that failureto timely provide such notice shall not preclude the Affected Party from obtaining the relief contemplated inSection 8.1 as a result of a Force Majeure Event except to the extent that the Non-Affected Party would be materiallyand adversely affected as a result of the Affected Party’s failure to timely deliver such notice. Any suspension ofperformance as a result of a Force Majeure Event shall be of no greater scope and of no longer duration than isreasonably attributable to the Force Majeure Event; further, the Affected Party shall use commercially reasonableefforts to remedy its inability to perform its obligations under this Agreement, and shall promptly notify the Non-Affected Party when the Affected Party is able to resume performance of its obligations under this Agreement.8.3 Make-up. In addition to the Affected Party’s obligations under Section 8.2, the Parties may mutuallyagree to make-up resulting delays or deficiencies due to a Force Majeure Event through an adjustment, as necessary, tothe Terminal Services Fee.8.4 Termination. Notwithstanding any other provision of this Section 8, if a Force Majeure Event lasts formore than one hundred eighty (180) consecutive Days or for more than hundred eighty (180) Days in the aggregateduring any twelve (12) month period, the Non-Affected Party may terminate this Agreement upon written notice to theAffected Party; provided, however, that such one hundred eighty (180) Day period, in either case, shall be extendedby an additional ninety (90) Days if the Affected Party shall, prior to the expiration of such ninety (90) Day period,have submitted to the- 16 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Non-Affected Party a remedial action plan that sets forth a reasonably feasible course of repairs, improvements,changes to operations, or other actions that would permit the Affected Party to perform its obligations under thisAgreement as soon as reasonably practicable and such Party pursues the remedial action plan in a commerciallyreasonable and diligent manner. Termination of this Agreement by a Party under this Section 8 shall be withoutliability to such Party; provided that such termination shall not affect any rights or obligations that may have accruedprior to such termination or that expressly or by implication are intended to survive termination, whether resulting fromthe event giving rise to the right to terminate or otherwise.Section 9. Inspection of and Access to Terminal.9.1 Inspections. Subject to Customer meeting Owner’s safety requirements and its other reasonable rulesand regulations concerning activities in and around the Terminal, Owner grants to Customer and its inspectors andother Agents the right to enter the Terminal (a) for purposes of observing and verifying Owner’s performancehereunder, and (b) during normal business hours and upon reasonable prior notice, for purposes of examination, testingand audit of any scale or other equipment, Terminal records pertaining to the loading of Biomass and Owner’soperational procedures and practices from time to time, which rights under both clauses (a) and (b) will be exercised ina way that will not interfere with or diminish Owner’s control over or its operation of the Terminal or the Berth andwill be subject to reasonable rules and regulations from time to time promulgated by Owner.9.2 Nature of Access Right. Customer acknowledges that any grant of the right of access to the Terminalor the Berth under this Agreement or under any document related to this Agreement is a grant of merely a license andconveys no interest in or to the Terminal or any part thereof.Section 10. Assignment.10.1 Assignment Generally. Except as otherwise expressly provided in this Section 10, neither Party maydirectly or indirectly assign its rights and obligations under this Agreement, in whole or in part, by operation of law orotherwise, without the prior written consent of the other Party (such consent not to be unreasonably withheld,conditioned or delayed), and any purported assignment made other than in accordance with this Section 10 shall benull and void ab initio.- 17 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 10.2 Permitted Assignments. Notwithstanding Section 10.1, the following are permitted, subject to thefollowing terms and conditions:(a) collateral assignment by a Party to its Financing Parties, and further assignment by suchFinancing Parties following any foreclosure of their security interest in this Agreement, in which case neither suchParty nor, following any post-foreclosure assignments, its Financing Parties shall have any liability with respect to thefuture performance of this Agreement;(b) assignment by a Party to an Affiliate of such Party; provided, however, that, in the case of anyassignment by a Party to an Affiliate without the express consent of the other Party to such specific assignment, theassigning Party shall remain jointly and severally liable for the assigned obligations and shall notify the other Party ofthe assignment (and identify the name of, and notice address information for, such Affiliate), unless (i) in the case of anassignment by either Party, the assignment is made to the successor to all or substantially all of the assets of Owner orCustomer, or (ii) in the case of an assignment by Customer, the assignment is made to a direct or indirect wholly-owned Subsidiary of Customer (or such successor), so long as the performance of all such Subsidiary’s obligationsunder this Agreement is guaranteed by Customer (or such successor) under a guaranty that is in form and substancereasonably satisfactory to Owner; and(c) subcontracting and the assignment of rights and delegation of obligations by Owner (withoutrelieving Owner of its obligations to Customer hereunder), including to (i) Enviva Management Company, LLC fromtime to time consistent with any Management Services Agreement between Enviva Management Company, LLC andOwner (or an Affiliate of Owner) under which Owner is a “Service Recipient” or (ii) the Port Authority in accordancewith the Operation and Services Agreement.Section 11. Compliance with Law and Safety. Customer warrants that the Biomass tendered by it isproduced and transported, and Owner warrants that the Terminal and the Terminal Services provided by it under thisAgreement are, in material compliance with all applicable Laws and the then-current version of NFPA 664: Standardfor the Prevention of Fires and Explosions in Wood Processing and Woodworking Facilities or any successorpublication. Each Party also warrants that it may lawfully receive and handle the Biomass, and it will furnish to theother Party any evidence required to provide compliance with such Laws, and will file with governmental agencies anyrequired reports evidencing such compliance with those Laws.- 18 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Section 12. Default, Termination and Other Remedies.12.1 Customer Default. Each of the following shall be deemed an event of default by Customer hereunder(each, a “Customer Event of Default”):(a) Customer fails to perform any of its material obligations under this Agreement (not otherwiseprovided for as a separate Customer Event of Default under this Agreement), for a period of thirty (30) Days afterCustomer’s receipt of written notice thereof; provided, that such period shall be extended for an additional reasonableperiod if such failure is capable of being cured but a cure cannot be reasonably effected within thirty (30) Days,corrective action is instituted by Customer within the thirty (30) Day period and such action is diligently pursued untilsuch default is corrected; provided further, that the cure period shall in no event exceed ninety (90) Days fromCustomer’s receipt of the written notice of the performance failure;(b) Except for disputed fees or charges under this Agreement, if Customer fails to pay any amountsdue hereunder, which failure continues for a period of ten (10) Days after the date on which written notice of a failureto pay is received by Customer; or(c) Customer becomes Bankrupt.12.2 Owner Remedies for Customer Default. Upon the occurrence and during the continuation of aCustomer Event of Default, and at any time following the expiration of the respective periods referred to in Section12.1, in addition to any other rights set forth elsewhere in this Agreement or provided by Law, Owner may serve awritten notice upon Customer (an “Owner Notice of Termination”) that Owner elects to terminate this Agreement upona specified date which shall be no earlier than one (1) Day and no later than twenty (20) Days after the date of servingsuch Owner Notice of Termination, and this Agreement shall then expire on the date so specified as if that date hadbeen originally fixed as the expiration date of the term herein granted, without waiving any other remedies that Ownermay have. No Customer Event of Default shall be deemed waived unless in writing and signed by Owner.12.3 Owner Default. Each of the following shall be deemed an event of default by Owner hereunder (each,an “Owner Event of Default”):(a) Owner fails to perform any of its material obligations under this Agreement (not otherwiseprovided for as a separate Owner Event of Default under this Agreement) for a period of thirty (30) Days afterOwner’s receipt of written notice thereof; provided, that such period shall be extended for an additional reasonableperiod if a cure cannot be reasonably effected within thirty (30) Days, corrective action is instituted by Owner withinthe thirty (30) Day period and such action is diligently pursued until such default is corrected; provided further, that thecure- 19 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. period shall in no event exceed ninety (90) Days from Owner’s receipt of the written notice of the performance failure;(b) Except for disputed fees or charges under this Agreement, if Owner fails to pay any amountsdue hereunder, which failure continues for a period of ten (10) Days after the date on which written notice of a failureto pay is received by Owner; or(c) Owner becomes Bankrupt.12.4 Customer Remedies for Owner Default. Upon the occurrence and during the continuation of an OwnerEvent of Default, and at any time following the expiration of the respective periods referred to in Section 12.3, inaddition to any other rights set forth elsewhere in this Agreement or provided by Law, Customer may serve a writtennotice upon Owner that Customer elects to terminate this Agreement upon a specified date (a “Customer Notice ofTermination”) which shall be no earlier than one (1) Day and no later than twenty (20) Days after the date of servingsuch Customer Notice of Termination. This Agreement shall expire on the date specified in such Customer Notice ofTermination as if that date had been originally fixed as the expiration date of the term herein granted, without waivingany other remedies that Customer may have. No Owner Event of Default shall be deemed waived unless in writingand signed by Customer.12.5 Remedies of Each Party Generally. Without limiting its rights under this Agreement, after an Event ofDefault, the non-defaulting Party may set off any or all amounts due and owing to it by the defaulting Party against anyor all amounts due and owing by it or any of its wholly-owned Affiliates to the defaulting Party (whether under thisAgreement or otherwise and whether or not then due). Nothing in this Section 12.5 is intended in any way to limit orprejudice any other rights or remedies the non-defaulting Party may have under this Agreement or at law. Theremedies of the non-defaulting Party provided in this Agreement are not exclusive and, except as otherwise expresslylimited by this Agreement, are in addition to all other remedies of the non-defaulting Party at law or in equity.12.6 Lien on Biomass.(a) Owner, as operator of the Terminal and bailee of Customer’s Biomass, is hereby granted a firstand preferred lien on: (i) the Biomass from the time of receipt until delivery to Customer; and (ii) any property ofCustomer located at the Terminal or any other terminal facility owned or operated by Owner or its Affiliates orotherwise in the custody of Owner or its affiliates to secure the payment of all sums due from Customer under thisAgreement (the “Collateral”). Customer hereby authorizes Owner to file one or more financing or continuationstatements, and amendments thereto, relative to all or any part of the Collateral without the signature of Customer, ineach case where permitted by law, and to take any and all other actions necessary to secure its interest in theCollateral. In addition, Customer agrees that from time to time it will promptly execute and deliver all instruments anddocuments, and take all further action, that Owner may reasonably request as being necessary or desirable in order toperfect and protect- 20 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. any security interest granted or purported to be granted hereby or to enable Owner to exercise and enforce its rights andremedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, Customer willexecute and file such financing or continuation statements, or amendments thereto, and such other instruments ornotices, as Owner may request as being necessary or desirable in order to perfect and preserve the security interestsgranted or purported to be granted hereby.(b) In the event Customer should fail to pay sums owed by it to Owner, after notice in accordancewith Section 12.1(b), Owner may proceed in law to enforce its lien to satisfy all contractual and statutory obligations ofCustomer, including all costs, attorneys’ fees, and expense incurred by Owner in the enforcement of its lien and therecovery of monies owed to it by Customer. Customer hereby agrees that in the event of any such default, in additionto other remedies set forth herein and as may be available under law, Owner may sell, on commercially reasonableterms, any such Collateral upon which Owner has a lien to satisfy any debt owed by Customer to Owner out of theproceeds thereof. Customer hereby waives any right to notice or otherwise associated with any such sale to which itmay be entitled under this Agreement or at law or in equity.Section 13. Insurance.13.1 Customer’s Required Insurance. Customer, at Customer’s sole cost and expense, shall carry andmaintain the following insurance with companies authorized to do business in the applicable jurisdictions andpossessing a minimum A.M. Best rating of A-VIII:(a) Commercial General Liability insurance with minimum limits of $1,000,000 per occurrence,$2,000,000 aggregate, covering bodily injury liability, personal injury liability and property damage liability, andincluding contractual liability, products and completed operations coverage;(b) Statutory Worker’s Compensation insurance;(c) Employer’s Liability insurance with a minimum limit of $1,000,000 each accident; and(d) Automobile Liability insurance with a minimum limit of $1,000,000 each accident; and(e) Umbrella policy with a minimum limit of $5,000,000, scheduling General Liability, AutomobileLiability and Employers Liability coverages.13.2 Customer Certificates of Insurance; Notification of Changes or Lapse. Customer shall submitcertificates of all insurance required under Section 13.1 to Owner. All policies shall contain a waiver of subrogationagainst Owner. All such general liability policies- 21 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. with the exception of Workers Compensation and the required certificates relating thereto shall name Owner (includingits officers and directors), Owner’s consultants, lenders, and the agents and employees of any of them, as additionalinsured. The additional insured clause shall be ISO Additional Insured Endorsement CG 20 10 11 85 or a substituteproviding equivalent coverage under the general liability and umbrella program. All policies shall provide that theinsurance carrier will give Owner thirty (30) Days prior written notice of the expiration or any cancellation or changein coverage of such policies.13.3 Owner’s Required Insurance. Owner, at Owner’s sole cost and expense, shall carry and maintain thefollowing insurance with companies authorized to do business in the applicable jurisdictions and possessing aminimum A.M. Best rating of A-VIII:(a) Commercial General Liability insurance with minimum limits of $5,000,000 per occurrence,$10,000,000 aggregate, covering bodily injury liability, personal injury liability and property damage liability, andincluding contractual liability, products and completed operations coverage;(b) Statutory Worker’s Compensation insurance;(c) Employer’s Liability insurance with a minimum limit of $5,000,000 each accident; and(d) Automobile Liability insurance with a minimum limit of $5,000,000 each accident;(e) Umbrella policy, with a minimum limit of $5,000,000, scheduling General Liability,Automobile Liability and Employers Liability coverages; and(f) so called “All Risk” physical damage insurance, including flood and earthquake, covering lossor damage to the Terminal, including with respect to any trade fixtures, machinery, equipment, and other personalproperty located in or about the Terminal in an amount not less than one hundred percent (100%) of the fullreplacement cost thereof from time to time.13.4 Owner Certificates of Insurance; Notification of Changes or Lapse. Owner shall submit certificates ofinsurance required under Section 13.3 to Customer. All policies shall contain a waiver of subrogation againstCustomer. All such general liability policies with the exception of Workers Compensation and the required certificatesrelating thereto shall name Customer (including its officers and directors), Customer’s consultants, lenders, and theagents and employees of any of them, as additional insured. The additional insured clause shall be ISO AdditionalInsured Endorsement CG 20 10 11 85 or a substitute providing equivalent coverage under the general liability andumbrella program. All policies shall provide that the insurance carrier will give Customer thirty (30) Days prior writtennotice of the expiration or any cancellation or change in coverage of such policies.- 22 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 13.5 Reports of Accidents and Injuries. Owner and Customer will provide prompt written notice to eachother of all accidents or occurrences resulting in injuries to employees or third parties, or damage to property arising outof or during the course of the performance under this Agreement and, as soon as practical, will furnish each other witha copy of all reports made by any insurance underwriter or non-privileged reports to others of such accidents oroccurrences.13.6 Application of Insurance Proceeds. Owner shall apply any insurance proceeds directly to thereplacement or repair of damaged assets to which such insurance proceeds relate.Section 14. Indemnity and Liability.14.1 Indemnification of Customer Group. To the fullest extent permitted by law, and except as otherwiseprovided herein this Agreement (including Section 6.4), Owner hereby agrees to release, protect, defend, indemnify,and hold harmless the Customer Group from and against any and all Claims and Losses (inclusive of Claims made byor Losses of, directly or indirectly, a Third Party) resulting from injury to or death of individuals or loss or destructionof or damage to tangible property (including Vessel damage), to the extent such Claims and Losses arise as a result ofor in connection with the negligence or willful misconduct of Owner in connection with or related to the TerminalServices or this Agreement; provided, however, that Owner shall not be required to defend, indemnify or holdharmless any member of the Customer Group for any Claims and Losses to the extent such Claims and Losses are dueto the negligence or willful misconduct of Customer.14.2 Indemnification of Owner Group. To the fullest extent permitted by law, and except as otherwiseprovided herein this Agreement, Customer hereby agrees to release, protect, defend, indemnify, and hold harmless theOwner Group from and against any and all Claims and Losses (inclusive of Claims made by or Losses of, directly orindirectly, a Third Party) resulting from injury to or death of individuals or loss or destruction of or damage to tangibleproperty (including damage to Terminal equipment and facilities), to the extent such Claims and Losses arise as a resultof or in connection with the negligence or willful misconduct of Customer in connection with or related to the TerminalServices or this Agreement; provided, however, that Customer shall not be required to defend, indemnify or holdharmless any member of the Owner Group for any Claims and Losses to the extent such Claims and Losses are due tothe negligence or willful misconduct of Owner.14.3 Notice; Procedure. Not later than fifteen (15) Days after receipt of written notice from either Party ofany Claim or Losses related to any Claim for which such Party or a member of such Party’s Owner Group orCustomer Group, as applicable, is seeking indemnification under this Agreement (such Party or member of suchParty’s Owner Group or Customer Group seeking indemnification, collectively, the “Indemnified Party”), the Partyreceiving such notice (the “Indemnifying Party”)- 23 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. shall, to the extent that such Claim or Losses are indemnifiable by the Indemnifying Party hereunder, affirm in writingby notice to the Indemnified Party that the Indemnifying Party will indemnify, defend and hold harmless theIndemnified Party in accordance with this Agreement and will, at its own cost and expense, assume on behalf of theIndemnified Party and conduct with due diligence and in good faith the defense thereof with counsel selected by theIndemnifying Party that is reasonably satisfactory to the Indemnified Party; provided, however, that the IndemnifiedParty shall have the right to be represented therein by counsel of its own selection at its own expense or, in the eventthat the Indemnifying Party breaches any of its obligations hereunder to timely and diligently assume and conduct thedefense of such Claim, at the expense of the Indemnified Party. The Indemnifying Party shall not, without the priorwritten consent of the Indemnified Party, settle or compromise or permit a default judgment or a consent to entry of anyjudgment with respect to any Claim for which it has indemnification obligations hereunder unless such settlement orcompromise or judgment is solely for the payment of money and includes a complete and unconditional release of theIndemnified Party with respect to all liability related to such Claim and Losses related to such Claim upon the makingof such payment.Section 15. Other Representations, Warranties and Covenants.15.1 Representations and Warranties. As a material inducement to entering into this Agreement, each Party,with respect to itself, represents and warrants to the other Party as of the Effective Date of this Agreement as follows:(a) it is duly organized, validly existing and in good standing under the Laws of the jurisdiction ofits formation and is qualified to conduct its business in those jurisdictions necessary to perform its obligationshereunder, other than those jurisdictions as to which the failure to be so qualified or in good standing could not,individually or in the aggregate, reasonably be expected to materially adversely affect its ability to perform thisAgreement;(b) the execution, delivery and performance of this Agreement are within its powers, have beenduly authorized by all necessary action and do not conflict with or violate any of the terms or conditions in itsgoverning documents or any agreement to which it is a party, or any law, rule, regulation, order, writ, judgment, decreeor other legal or regulatory determination applicable to such Party;(c) this Agreement constitutes a legal, valid and binding obligation of such Party, enforceableagainst it in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization and other Lawsaffecting creditor’s rights generally, or by the exercise of judicial discretion in accordance with general principles ofequity;(d) to such Party’s knowledge, there are no actions, proceedings, judgments, rulings or orders,issued by or pending before any court or arbitral body that would materially adversely affect its ability to perform itsobligations under this Agreement; and- 24 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (e) no consent, approval or authorization of, or registration, filing or declaration with, anyGovernmental Entity or any other Person required as of the date hereof, which has not been received, waived orsatisfied as of the Effective Date, is required for the valid execution and delivery of this Agreement.Section 16. Miscellaneous.16.1 Notices. Except as expressly provided in this Agreement, any notice, demand, offer, or othercommunication required or permitted to be given pursuant hereto shall be in writing signed by the Party giving suchnotice, demand, offer, or other communication and shall be hand delivered or sent by registered mail, overnight courieror facsimile to the other Party at its address set forth below. Each Party may change its address by providing noticeunder this Section 16.1 to the other Party. Unless otherwise provided herein, all notices, requests or othercommunications hereunder shall be effective at the end of Office Hours on the Day actually received, if receivedduring Office Hours, and otherwise shall be effective at the close of Office Hours on the first Business Day after theDay on which received.If to Owner: Enviva Port of Wilmington, LLC7200 Wisconsin AvenueSuite 1000Bethesda, MD 20815Attention: General CounselFacsimile: (240) 482-3774 If to Customer: Enviva, LPc/o Enviva Partners GP, LLC (as General Partner of its sole member)7200 Wisconsin AvenueSuite 1000Bethesda, MD 20814Attn: General CounselFacsimile No.: (918) 747-215016.2 Interpretation. Except as otherwise set forth herein, or where the context of this Agreement otherwiserequires:(a) headings and titles are for convenience only and do not affect the interpretation of thisAgreement;- 25 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. (b) the gender of all words used herein shall include the masculine, feminine and neuter and thenumber of all words shall include the singular and plural;(c) the terms “hereof”, “herein,” “hereto” and similar words refer to this entire Agreement and notany particular Section, Exhibit or any other subdivision of this Agreement;(d) references to “Section” or “Exhibit” are to this Agreement unless specified otherwise;(e) reference to “this Agreement” (including any Exhibit hereto) or any other agreement ordocument shall be construed as a reference to such agreement or document as the same may be amended, modified,supplemented or restated, and shall include a reference to any agreement or document that amends, modifies,supplements or restates, or is entered into, made or given pursuant to or in accordance with its terms;(f) references to any law, statute, rule, regulation, standard (including for testing and sampling),notification or statutory provision shall be construed as a reference to the same as it may have been, or may from timeto time be, amended, modified or re-enacted;(g) references to any Person shall be construed as a reference to such Person’s successors andpermitted assigns;(h) “includes”, “including” and similar phrases mean “including, without limitation”;(i) all Exhibits are incorporated herein and made a part of this Agreement for all purposes; and(j) references to “or” will be deemed to be disjunctive but not necessarily exclusive (i.e., unless thecontext dictates otherwise, “or” will be interpreted to mean “and/or” rather than “either/or”).16.3 Amendment. No amendment, supplement or other modification of this Agreement shall be valid unlessevidenced in writing and signed by both Parties.16.4 Severability of Provisions. If any provision of this Agreement is found to be void and unenforceable,such provision shall be deemed to be deleted from this Agreement and the remaining provisions of this Agreementshall continue to have full force and effect. The Parties shall, in such event, negotiate in good faith to agree to amutually satisfactory valid and enforceable substitute provision implementing to the fullest extent possible theintentions of the Parties at the Effective Date.- 26 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 16.5 Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to thesubject matter hereof and, except as herein stated and in the instruments and documents to be executed and deliveredpursuant hereto, contains all of the representations, undertakings and agreements of the Parties in respect of the subjectmatter hereof. This Agreement supersedes all prior meetings, correspondence, and negotiations between the Parties.There are no representations, warranties, covenants, agreements or collateral understandings, oral or otherwise (expressor implied) of any kind between the Parties in respect of the subject matter hereof, except as contained herein.16.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of whichshall be considered an original, but all of which shall together constitute one and the same instrument. Any executedcounterpart may be delivered in portable document format (.pdf) or by other electronic means and, when so delivered,shall be legally enforceable in accordance with its terms.16.7 Third Parties. This Agreement and all rights hereunder are intended for the sole benefit of the Partiesand shall not imply or create any rights on the part of, or obligations to, any other Person (other than to members of theCustomer Group and Owner Group pursuant to and in accordance with Section 6.2 and Section 14).16.8 Non-Recourse. The Parties’ respective obligations hereunder are intended to be the obligations of therespective Parties only and no recourse for any obligation of a Party hereunder, or for any claim based thereon orotherwise in respect thereof, shall be had against any incorporator, shareholder, partner, member, officer or director, orAffiliate, as such, past, present or future of such Party.16.9 Attorneys’ Fees. The Parties agree that in the event either of the Parties institutes legal proceedings toenforce any of the terms of this Agreement, all court costs and reasonable attorneys’ fees incurred by the substantiallyprevailing Party shall be reimbursed by the other Party.16.10 No Waiver. Either Party’s waiver of any breach or failure to enforce any of the terms of thisAgreement at any time shall not in any way affect, limit, modify, or waive such Party’s right thereafter to enforce orcompel strict compliance with every term hereof, notwithstanding such waiver or failure or any course of dealing orcustom of the trade.16.11 No Agency. No Party shall be deemed hereunder to be an agent of, or partner or joint venturer with,any other Party.- 27 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 16.12 Governing Law.(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED INACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK AND, WHEREAPPLICABLE, THE GENERAL MARITIME LAW OF THE UNITED STATES, WITHOUT REFERENCE TOANY CHOICE OF LAW PRINCIPLE THAT WOULD RESULT IN THE APPLICATION OF ANY OTHERLAW.(b) The United Nations Convention on Contracts for International Sale of Goods shall not apply tothis Agreement.(c) The Parties acknowledge and agree that: (i) this Agreement is for the purpose of providingterminalling services, which shall not include storage services except as may be incidental to providing suchterminalling services, (ii) each of the Domes used in connection with the provision of the Terminal Services is notintended to provide storage or constitute a warehouse but rather is intended to protect the Biomass from the elementsfor a very limited amount of time prior to its being loaded onto a Vessel for overseas or other transport, (iii) anyincidental storage services provided by Owner during any time in which Biomass occupies a space in the Terminal arefree of charge, and (iv) the Parties waive to the maximum extent permitted by applicable Laws any application of theterms of the Uniform Commercial Code of the State of North Carolina in respect of warehouses.16.13 Dispute Resolution. Any dispute arising from this Agreement (including a dispute regarding theexistence, validity or termination of this Agreement or the consequences of its nullity), shall be referred to and finallyresolved by arbitration under the rules of the American Arbitration Association (the “Rules”), which Rules are deemedto be incorporated by reference into this Section 16.13 except as expressly amended by this Section 16.13. Thetribunal shall consist of three (3) arbitrators, two (2) of whom shall be nominated by the respective Parties and the thirdof whom shall be jointly selected by the two arbitrators selected by the Parties. The seat of the arbitration and thevenue of all hearings shall be New York, NY and the language of the arbitration shall be English. The arbitral tribunalshall have power to award on a provisional basis any relief that it would have power to grant on a finalaward. Without prejudice to the powers of an arbitrator provided by the Rules, by statute or otherwise, the arbitraltribunal shall have power at any time, on the basis of written evidence and the submissions of the Parties alone, tomake an award in favor of the claimant (or the respondent if a counterclaim) in respect of any claims or counterclaimsto which there is no reasonably arguable defense (either substantively or as to the amount of any damages or othersums to be awarded). To the extent permitted by applicable Law, the Parties hereby agree to waive any rights to referpoints of law, or to appeal, to the courts; provided, that nothing in this Section 16.13 shall be construed as preventingeither Party from seeking conservatory or similar interim relief in any court of competent jurisdiction.- 28 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Section 17. Confidentiality.17.1 Confidentiality. The existence and terms of this Agreement and information disclosed by or on behalfof either Party to the other Party or its representatives in connection with this Agreement (hereinafter referred to as“Confidential Information”) shall, during the Term and until the expiration of twelve (12) months after this Agreementhas terminated, be treated as confidential by each Party and shall not be disclosed in whole or part by either Party toany third party without the prior written consent of the other Party. No breach of this Section 17.1 shall entitle theother Party to terminate this Agreement.17.2 Confidentiality Carve-outs. Notwithstanding Section 17.1, neither Party shall be required to obtain theprior written consent of the other Party in respect of disclosure of Confidential Information:(a) to Affiliates of such Party; provided, that such Party shall require such Affiliates to keep theConfidential Information confidential on the same terms as are provided in this Section 17;(b) to Persons professionally engaged by or on behalf of such Party;(c) to any Government Entity having jurisdiction over such Party, but only to the extent that suchParty is required by such Government Entity to make disclosure;(d) to any investors or potential investors in such Party or any affiliate thereof; provided, that suchParty shall require such investor or potential investor to keep the Confidential Information confidential on the sameterms as are provided in this Section 17;(e) to any lenders or prospective lenders in connection with the financing of such Party’soperations;(f) to the extent reasonably required by any Laws or rule of any relevant stock exchange or to theextent required by any juridical, arbitral or administrative proceeding; or(g) to the extent any disclosure is required to be made in the financial statements of either Party orany of its Affiliates or in publicly filed documents to effect the transactions contemplated by this Agreement;provided, that the disclosing Party shall keep the disclosure of the Confidential Information to the minimum necessaryfor the purpose for which it is disclosed.- 29 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. 17.3 Securities Filings. Notwithstanding anything to the contrary herein, either Party and its Affiliates shallbe permitted to include in documents filed with regulators regarding securities offered or to be offered of such Party oran Affiliate of such Party (and in any amendments thereto or related offering documents) any information regarding theParties, this Agreement and the transactions contemplated by this Agreement.17.4 Press Releases. Neither Party shall issue any press release or make any public announcement relating tothe subject matter of this Agreement without the prior written consent of the other Party.(Signature page follows)- 30 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. This Agreement has been executed by the authorized representatives of each Party as indicated below effective as ofthe Effective Date. Enviva Port of Wilmington, LLC Enviva, LP By: Enviva Wilmington Holdings, LLC, as its solemember By: Enviva GP, LLC, as its general partner By: Enviva Development Holdings, LLC, as itsmanaging member By:/s/ William H. Schmidt, jr. By:/s/ STEPHEN F. REEVES Name:William H. Schmidt, Jr. Name:Stephen F. Reeves Title:President, General Counsel and Secretary Title:Executive Vice President and Chief FinancialOfficer - 31 - Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT A COMMERCIAL DETAILS1. Customer Addresses for InvoicesEnviva, LPc/o Enviva Partners GP, LLC7200 Wisconsin Ave., Suite 1000Attention: Vonetta T. BrownCorporate Accounts Payable ManagerPhone: +1 240 482 3837Fax: +1 301 657 5567Email: accounting@envivabiomass.com and vonetta.brown@envivabiomass.com 2. Requirements of Owner’s Vetting Process.(a) Vessel Requirements. Performing Vessel to be/have:(i) Singledeck Bulkcarrier engines./bridge aft BoxShaped or Self trimming supramax or smaller;(ii) Maximum Vessel age of 20 years;(iii) Geared with 20 metric ton cranes for use at load as required for load operations by Owner;(iv) Fully suitable for all load/discharge berths/ports/facilities including but not limited toLOA/Beam/Draft/WLTHC;(v) Classed highest Lloyds or equivalent for the duration of the voyage by a member of the IACS;(vi) CO2 fitted as required by the trade (mandatory);(vii) Entered with a first class P & I Club with full coverage and to remain so for duration of voyage;(viii) ITF or ITF Equivalent;(ix) stanchions, if any, to be fully collapsible except in front of Vessel’s crane houses and in no wayinterfere with the loading operations; and(x) Rightship approval as per receiver vetting requirements(b) With Vessel nomination, Customer to provide Owner the following:(i) Full description of Vessel;(ii) Present position, intended itinerary prior arrival loading port and ETA loading port;(iii) Last 3 cargoes and last 3 load/discharge ports;(iv) Copies of valid class/ISPS/Gear/P+I/ISM/DOC/SMC certificates by email attachment;(v) Ownership chain;(vi) Pictures of Vessel holds when available, and Owner requires Customer’s efforts on this for eachvessel nomination; and(vii) Declared cargo quantity and intended stow plan for that shipment. A-1 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT B MARINE NOMINATIONS AND SCHEDULING1. Interpretation. In the event of any inconsistency between this Exhibit B and Section 5 of theAgreement, the terms and conditions of Section 5 shall prevail.2. Laycan and Vessel Nominations.(a) Shipping Schedule. By the first Business Day of each month from and after the Effective Date,Customer shall provide Owner a non-binding, indicative schedule of the Shipment size and 15 day windows of eachShipment to be delivered to Customer over the following 3-month period.(b) Laycan Nominations. At least 30 days prior to the start of the applicable Laycan, Customershall nominate to Owner a 10-day window for such Laycan, which Customer shall narrow to a 7-day Laycan at least21 days prior to the start of such Laycan. For the avoidance of doubt, the final 7-day Laycan must be within theforegoing 10-day window.(c) Vessel Nominations. Customer shall nominate the final performing Vessel for Shipments to beloaded by Owner at least 10 days before the first day of the applicable Laycan. Owner shall have one (1) BusinessDay to accept or reject such nominated Vessel, in writing to Customer. Upon any such rejection, Customer shall havethe right to nominate a different Vessel within 2 Business Days of its receipt of such rejection in accordance with, andconforming to, the requirements of this Agreement. In the event that Customer does not nominate a Vessel whenrequired hereunder and such failure continues for 5 days following Customer’s receipt of notice thereof from Owner,Owner shall have the right, upon two (2) Business Days’ written notice to Customer, to suspend Terminal Servicesuntil such failure has been cured or remedied to Owner’s reasonable satisfaction.3. Estimated Time of Arrival. Customer or its designee will notify Owner of the estimated date and timeof arrival at the Terminal of each Vessel with an approved nomination notice as soon as this information is available,but no later than forty-eight (48) hours in advance of the estimated time of arrival. The Vessel will be required to sendOwner answers to pre-berthing questions at least forty-eight (48) hours prior to the estimated time of arrival. Ownerwill provide pre-berthing questions to the Vessel early enough to allow it a reasonable time to respond.4. Notice of Readiness. After a Vessel has arrived at the customary anchorage or place of waiting,received all required clearances from Governmental Entities and is otherwise in all respects ready to proceed to berthand commence loading a Shipment, it will tender a Notice of Readiness to Owner in writing or via other availablemeans acceptable to Owner. The Notice of Readiness will state the estimated time the Vessel will arrive at theTerminal wharf given any tidal or other constraints.5. Vessel Berth. Owner shall use due diligence to designate a safe berth for the Vessel at which it canremain safely afloat and conduct cargo operations; provided, however, that Owner is not responsible or liable formaintaining the depth of the channel leading to the berth. CustomerB-1 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. shall ensure all Vessels will be dimensionally acceptable and meet all requirements of the Terminal’s wharf facilitiesand governmental agencies.6. Berthing Order. Vessels arriving and issuing valid Notices of Readiness within the Laycan confirmedby Owner will be berthed at the Berth in the order of their tendering of valid notices of readiness, on a “first come, firstserved” basis. A Vessel shall be deemed to have arrived at such time as it has given a valid Notice of Readiness toOwner.7. Berth Shifting & Vacating. Owner may require any Vessel to shift from one berth to another at theTerminal at any time. Owner may require any Vessel to vacate its berth if such action is reasonably required for thesafe operation of the Terminal. If the Vessel is required to so vacate its berth, the Vessel, after tendering Notice ofReadiness to recommence loading or discharging, will be re-berthed in the next open time slot on the Terminal dockschedule. If any Vessel fails to vacate its berth at the Terminal upon completion of loading Customer’s Shipment, thenCustomer shall be responsible for the costs incurred by other vessels that otherwise would be occupying the Berth butfor the failure of Customer’s Vessel to vacate same.8. Pollution, Prevention and Responsibility. Customer or its Agent will require all Vessels promptly anddiligently to prevent, mitigate and remediate all pollution emanating from said Vessels. Customer or its Agent willrequire all Vessels to comply with Law and to carry all liability and pollution insurance required by Law. In the eventof any Biomass spills or other environmentally polluting discharge caused by the fault of Customer’s Vessel, Ownershall immediately notify Customer, and, subject to Customer’s consent, is authorized to commence containment orcleanup operations as deemed appropriate or necessary by Owner (and consented to by Customer). All reasonablecosts of containment or cleanup for such spill or discharge shall be borne by Customer, except that, in the event a spillor discharge is the result of joint negligence or misconduct of both Owner and Customer’s Vessel, costs of containmentor cleanup shall be borne jointly by Owner and Customer in proportion to each Party’s or its Vessel’s negligence ormisconduct.9. International Ship and Port Facility Security Code Compliance. Customer shall ensure that any Vesselreceiving Customer’s Biomass under this Agreement is in compliance with the International Ship and Port FacilitySecurity Code and any relevant amendments to Chapter XI of SOLAS (“ISPS code”) or the Maritime TransportationSecurity Act (“MTSA”) of 2002, as applicable, and similar laws and regulations pertaining to the security of ports,facilities, or terminals. The Terminal will operate in compliance with all applicable Laws for the activities ascontemplated herein this Agreement. B-2 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. EXHIBIT C SPECIFICATIONSPARAMETERUNITSLIMITTOLERANCEMETHODPERFORMEDBYComposition Origin and SourceOnly Forest, plantation, and other virgin (chemically untreated)woodEN 14961-1Seller Decl.Bark% wt, arb<8% none Seller Decl.Additives or Binders% wt, arb<3% none Seller Decl.Extraneous Materials nonenone InspBurned or Charred Pellets nonenone InspWater Damage nonenone InspSampling & Sample Prep EN 14778, EN14780Insp & LabBulk Physical Parameters Temperature deg C<60 1 deg CEN15234InspFines <3.15 mm (round-hole)%wt, atb<3.0 noneEN 15149Insp Diametermm 6 to 10noneEN 16127LabAverage Lengthmm 10-40noneEN 16127LabPellets < 40mm in Length%wt, atb>99.0 noneEN 16127LabPellets < 50mm in Length%wt, atb>99.9 Bulk Densitykg/m3>645-7502% of limitEN 15103LabDurability%wt, atb 97.5-990.5% absoluteEN 15210-1LabDSEAR Information Cloud Ignition Tempdeg C>400 none Lab**5mm Layer Ignition Tempdeg C>210 noneEN 13821Lab**Ignition Energy (capacitive) mJ>30 noneorLab**Explosion Pressurebar<10.5 noneASTM E2019Lab**Specific Dust Constant, KStbar x m/s<200 none Lab**Explosive Ratio, STST ST-1none Lab**Proximate Analysis Volatiles% wt, arb 70 – 824% of meanEN 15148LabTotal Moisture% wt, arb 4 – 100.5% absoluteEN 14774-1LabAsh% wt, db<1.5 0.1% absoluteEN 14775LabNCV (at const. pressure)GJ/mt, arb>16.5 0.3 GJ/mtEN 14918LabUltimate Analysis Oxygen%wt, arb 28 to 421.5% absoluteEN 15296LabNitrogen%wt, db<0.4 0.05% absoluteEN 15104LabSulfur (any ship)%wt, db<0.05 0.01% absoluteEN 15289LabSulfur (annual avg)%wt, db<0.02 0.01% absoluteEN 15289Lab C-1 123Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. Chlorine (any ship)%wt, db<0.02 0.01% absoluteEN 15289LabChlorine (annual avg)%wt, db<0.018 0.01% absoluteEN 15289LabFlourinemg/kg, db<70 noneEN 15289Lab*Ash Fusion DT (Oxidizing)deg C>1200 50CEN/TS 15370-1 Lab*DT (Reducing)deg C>1150 50CEN/TS 15370-1 Lab*Major and Minor Metals As,Co,Cr,Cu,Mn,Ni,Pb,Sb,Vmg/kg, db<800 noneEN 15297Lab*Asmg/kg, db<1.3 0.064 absoluteEN 15297Lab*Almg/kg, db<800 n/aEN 15290Lab*Camg/kg, db<5250 n/aEN 15290Lab*Cdmg/kg, db<0.3 0.06EN 15297Lab*Crmg/kg, db<15.0 0.032 absoluteEN 15297Lab*Cumg/kg, db<16.0 0.043 absoluteEN 15297Lab*Femg/kg, db<700 n/aEN 15290Lab*Pbmg/kg, db<10.0 0.033 absoluteEN 15297Lab*Mgmg/kg, db<750 n/aEN 15290Lab*Hgmg/kg, db<0.1 0.0046 absol.EN 15297Lab*Nimg/kg, db<10.0 n/aEN 15297Lab*K mg/kg, db<2100 n/aEN 15290Lab*Pmg/kg, db<300 14EN 15290Lab*Simg/kg, db<3400 n/aEN 15290Lab*Namg/kg, db<590 n/aEN 15290Lab*Snmg/kg, db<1.0 n/aEN 15297Lab*Timg/kg, db<100 n/aEN 15290Lab*V mg/kg, db<4.0 n/aEN 15297Lab*Znmg/kg, db<20 5.43 absoluteEN 15297Lab*Halogenated Organics Benzo-a-pyrenemg/kg, db<0.5 NoneGCMSLab*Pentachlorphenolmg/kg, db<3.0 NoneECDLab*Particle Size Distribution in Pellets % < 4.0mm% wt, atb>99.50.5% absoluteEN 16126Lab% < 3.15mm% wt, atb>98.0 0.5% absoluteEN 16126Lab% < 2.0mm% wt, atb>92.5 1% absoluteEN 16126Lab% < 1.0mm% wt, atb>50.0 5% absoluteEN 16126Lab% < 0.1mm% wt, atb<7.0 2% absoluteEN 16126LabMean Particle Size microns>420 nonesee noteLab atb = as-tested basis; arb = as-received basis; db = dry basis Tolerances are expressed in the same units as the limits, except where noted otherwise. Where tolerances are notcurrently declared in the referenced EN method (as indicated by n/a in theC-2 4 4Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results. table above), at such a time as said tolerances are officially declared by the relevant governing body, those toleranceswill be adopted in the table above. 1 – Additives or binders shall be of vegetal origin only and shall meet all sustainability requirements applicable to theBiomass 2 – Maximum bulk temperature shall be checked at the delivery point. 3 – Particles having at least one dimension less than 600 microns shall be deemed acceptable. 4 - The MIE shall be carried out on a sample seived to an average particle size of 75 micron and dried to a moisturecontent of 4%. * - Once each quarter, or as requested by Buyer ** - Once before first shipment, or as requested by Buyer “Lab” analysis shall be performed by an independent laboratory and “Insp” test shall be performed by anindependent inspector. “Insp & Lab” shall mean that a field test shall be performed by the independent inspector anda lab value shall be analyzed by the independent laboratory.C-3Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 21.1 LIST OF SUBSIDIARIES OF ENVIVA PARTNERS, LP Subsidiary of Enviva Partners, LPState of IncorporationEnviva, LP DelawareEnviva GP, LLC DelawareEnviva Energy Services, LLC DelawareEnviva Materials, LLC DelawareEnviva Partners Finance Corp. DelawareEnviva Pellets Ahoskie, LLC DelawareEnviva Pellets Amory, LLC DelawareEnviva Pellets Cottondale, LLC DelawareEnviva Pellets Northampton, LLC DelawareEnviva Pellets Perkinston, LLC DelawareEnviva Pellets Sampson, LLC DelawareEnviva Pellets Southampton, LLC DelawareEnviva Port of Chesapeake, LLC DelawareEnviva Port of Panama City, LLC DelawareEnviva Port of Wilmington, LLC DelawareEnviva MLP International Holdings, LLC DelawareEnviva Energy Services Coöperatief, U.A. NetherlandsEnviva Energy Services (Jersey), Limited Jersey Channel Islands Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Exhibit 23.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsEnviva Partners, LP:We consent to the incorporation by reference in the registration statement (No. 333‑203756) on Form S‑8 and registrationstatement (No. 333‑211136) on Form S‑3, as amended by Form S‑3/A, of Enviva Partners, LP and subsidiaries of our reportdated February 22, 2018, with respect to the consolidated balance sheets of Enviva Partners, LP and subsidiaries as ofDecember 31, 2017 and 2016, and the related consolidated statements of income, comprehensive income, changes inpartners’ capital, and cash flows for each of the years in the years in the three-year period ended December 31, 2017, and therelated notes (collectively, the “consolidated financial statements”), which report appears in the December 31, 2017 annualreport on Form 10-K of Enviva Partners, LP.(signed) KPMG LLPMcLean, VirginiaFebruary 22, 2018 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 31.1Certification of Principal Executive OfficerPursuant to Exchange Act Rule 13a‑14(a) or 15d‑14(a)I, John K. Keppler, certify that:1.I have reviewed this annual report on Form 10‑K for the year ended December 31, 2017 of Enviva Partners, LP;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of theperiod covered by this report based on such evaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of anannual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board ofdirectors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significantrole in the registrant’s internal control over financial reporting.Date: February 22, 2018 /s/ JOHN K. KEPPLER John K. Keppler Chairman, President and Chief Executive Officer (Principal Executive Officer) Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 31.2Certification of Chief Financial OfficerPursuant to Exchange Act Rule 13a‑14(a) or 15d‑14(a)I, Stephen F. Reeves, certify that:1.I have reviewed this annual report on Form 10‑K for the year ended December 31, 2017 of Enviva Partners, LP;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstances under which such statements weremade, not misleading with respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of,and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiaries, is made known to us by others within those entities, particularly during theperiod in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in thisreport our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of theperiod covered by this report based on such evaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurredduring the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of anannual report) that has materially affected, or is reasonably likely to materially affect, the registrant’sinternal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internalcontrol over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board ofdirectors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significantrole in the registrant’s internal control over financial reporting.Date: February 22, 2018 /s/ STEPHEN F. REEVES Stephen F. Reeves Executive Vice President and Chief Financial Officer (Principal Financial Officer) Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002In connection with the Annual Report on Form 10‑K of Enviva Partners, LP (the “Partnership”) for the year endedDecember 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John K.Keppler, Chairman, President and Chief Executive Officer of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to § 906 of the Sarbanes‑Oxley Act of 2002, that to the best of my knowledge:(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Partnership. /s/ JOHN K. KEPPLER John K. Keppler Chairman, President and Chief Executive Officer (Principal Executive Officer) Date: February 22, 2018 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.EXHIBIT 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002In connection with the Annual Report on Form 10‑K of Enviva Partners, LP (the “Partnership”) for the year endedDecember 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen F.Reeves, Executive Vice President and Chief Financial Officer of the Partnership, certify, pursuant to 18 U.S.C. Section 1350,as adopted pursuant to § 906 of the Sarbanes‑Oxley Act of 2002, that to the best of my knowledge:(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934; and(2)the information contained in the Report fairly presents, in all material respects, the financial condition andresults of operations of the Partnership.2 /s/ STEPHEN F. REEVES Stephen F. Reeves Executive Vice President and Chief Financial Officer (Principal Financial Officer) Date: February 22, 2018 Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.Source: Enviva Partners, LP, 10-K, February 22, 2018Powered by Morningstar® Document Research℠The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.

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