BETHESDA, Md.–(BUSINESS WIRE)–Enviva Partners, LP (NYSE: EVA) (the “Partnership” or “we”) today
reported financial and operating results for the second quarter of 2018.

Highlights:

• Reported net income of $3.5 million and adjusted EBITDA of $21.1
  million for the second quarter of 2018
• Excluding the full impact of the incident at the Chesapeake
  terminal, adjusted EBITDA would have been $23.7 million for the second
  quarter of 2018
• Partnership and our sponsor executed three new 15-year take-or-pay
  off-take contracts with Japanese customers totaling 700,000 MTPY
  commencing in 2021 and 2022
• Partnership executed a 650,000 MTPY, 5-year take-or-pay contract
  extension with Drax commencing in 2022
• Chesapeake terminal returned to operation on June 28, 2018;
  substantially all of the costs associated with the incident expected
  to be recoverable
• Reaffirmed full-year 2018 distribution guidance of at least $2.53
  per unit

“The Partnership and our sponsor now have long-term, contracted volumes
of almost 1.5 million tons per year with high credit quality Japanese
counterparties and continue to progress additional off-take contracts
supplying the fast-growing Asian market,” said John Keppler, Chairman
and Chief Executive Officer of Enviva. “Long-term off-take contracts are
expected to underpin substantial investment in new plant and port
capacity that, together with the robust operational and production
capabilities we demonstrated again this quarter, is the foundation for
long-term cash flow growth.”

Second Quarter Financial Results

Please refer to the “Presentation of Financial Results and Adoption of
ASC 606” and “Chesapeake Incident” sections below for additional
information related to the Partnership’s second quarter and year-to-date
financial results.

For the second quarter of 2018, we generated net revenue of $132.1
million, an increase of 3.6 percent, or $4.6 million, from the
corresponding quarter of 2017. Included in net revenue were product
sales of $129.7 million on a volume of 699,000 metric tons (“MT”) of
wood pellets during the second quarter of 2018, as compared to $121.7
million on a volume of 628,000 MT of wood pellets during the
corresponding quarter of 2017. The $8.0 million increase in product
sales was primarily attributable to an 11 percent increase in sales
volumes, partially offset by a decrease in pricing due primarily to
customer contract mix. Other revenue was $2.4 million for the second
quarter of 2018, as compared to $5.9 million for the corresponding
quarter of 2017. For the second quarter of 2018, other revenue primarily
consisted of $1.2 million in fees received from a customer requesting
scheduling accommodations, as well as $1.1 million of deficiency fees
under a terminal services agreement. Other revenue for the second
quarter of 2017 primarily consisted of a $2.7 million one-time payment
from our sponsor under a take-or-pay obligation and $1.9 million related
to purchase and sale transactions.

For the second quarter of 2018, we generated gross margin of $16.3
million, consistent with the corresponding period in 2017. Higher sales
volumes and lower production costs achieved during the second quarter of
2018 were offset by lower other revenue, lower pricing driven by
customer contract mix, as well as expenses incurred related to the
Chesapeake Incident, net of insurance recoveries.

Adjusted gross margin per metric ton was $37.74 for the second quarter
of 2018. Excluding the full financial impact of the Chesapeake Incident,
we would have earned adjusted gross margin per metric ton of $40.40.
Adjusted gross margin per metric ton was $45.18 for the second quarter
of 2017. Adjusting for the impact of ASC 606 for comparison purposes,
adjusted gross margin per metric ton would have been $42.35 for the
second quarter of 2017.

Net income for the second quarter of 2018 was $3.5 million compared to
net income of $1.5 million for the second quarter of 2017, an increase
of $2.0 million.

Adjusted EBITDA for the second quarter of 2018 was $21.1 million, as
compared to $23.3 million for the corresponding quarter of 2017. The
decrease was primarily attributable to business continuity costs
associated with the Chesapeake Incident, net of insurance recoveries.
Excluding the full financial impact of the Chesapeake Incident, adjusted
EBITDA would have been $23.7 million for the second quarter of 2018. We
expect that substantially all of the unrecovered costs resulting from
the incident will be recoverable in subsequent quarters through our
insurance policies and other contractual rights.

Distributable cash flow, prior to any distributions attributable to
incentive distribution rights paid to our general partner, was $11.1
million for the quarter. Excluding the full financial impact of the
Chesapeake Incident, distributable cash flow would have been $13.7
million for the quarter.

As of June 30, 2018, the Partnership had $13.8 million of cash on hand.
The Partnership had $30.0 million of borrowings outstanding under its
revolving credit facility as of June 30, 2018, primarily due to the
timing mismatch of the incurrence of costs associated with the
Chesapeake Incident and cost recovery through our insurance policies and
other contractual rights.

Distribution

As announced on August 1, 2018, the board of directors of our general
partner (the “Board”) declared a distribution of $0.63 per common unit
for the second quarter of 2018. This distribution is 10.5 percent higher
than the distribution for the second quarter of 2017 and represents the
twelfth consecutive distribution increase since the Partnership’s
initial public offering of units representing limited partner interests.
The Partnership’s distributable cash flow, net of amounts attributable
to incentive distribution rights, of $9.7 million for the second quarter
of 2018 covers the distribution for the quarter at 0.58 times. The
quarterly distribution will be paid on Wednesday, August 29, 2018, to
unitholders of record as of the close of business on Wednesday,
August 15, 2018.

“The distribution increase demonstrates our continued confidence in our
ability to deliver long-term, sustainable increases in per-unit
distributions over time,” said Shai Even, Executive Vice President and
Chief Financial Officer.

Outlook and Guidance

The Partnership reaffirms full-year 2018 per-unit distribution guidance
of at least $2.53, with continued quarter-over-quarter increases
expected throughout the year. Despite the impact from the Chesapeake
Incident, the Partnership expects that the full-year adjusted EBITDA and
distributable cash flow guidance provided in our February 22, 2018
earnings release remains achievable. However, the actual amounts we
report for any specific quarter and for full-year 2018 are subject to
the amount of recoveries from insurers and other responsible parties,
the timing and performance of which are not entirely within the
Partnership’s control. In addition, quarterly distribution coverage
ratios may not be comparable to the Partnership’s previously reported
periods or targets, as costs and recoveries associated with the
Chesapeake Incident may not fall within the same periods. The guidance
amounts do not include the impact of any additional acquisitions by the
Partnership from the sponsor’s joint ventures or third parties. In
addition, although deliveries to our customers are generally ratable
over the year, the Partnership’s quarterly income and cash flow are
subject to seasonality and the timing and mix of customer shipments
made, which vary from period to period. As such, the Board evaluates the
Partnership’s distribution coverage ratio on an annual basis when
determining the distribution for each quarter.

Market and Contracting Update

In addition to the more than 730,000 metric tons per year (“MTPY”) of
long-term contracts with Japanese counterparties that the Partnership
and its sponsor have previously announced, the Partnership executed a
15-year, 180,000 MTPY take-or-pay off-take contract commencing in 2022
with a major Japanese trading house to supply a new power plant in
Japan, subject to certain conditions precedent, which the Partnership
expects to be met in 2018. The Partnership also announced that its
sponsor executed two new take-or-pay off-take contracts with Sumitomo
Corporation to supply a total of 520,000 MTPY to new biomass power
plants in Japan. These new contracts include:

• A firm 15-year, 270,000 MTPY contract commencing in 2022 with Sumitomo
  Corporation.
• A 15-year, 250,000 MTPY contract commencing in 2021 with Sumitomo
  Corporation, subject to certain conditions precedent, which the
  Partnership expects to be met in 2018.

The Partnership also announced it has recently extended its relationship
with Drax Power Limited (“Drax”) by executing a firm, take-or-pay
off-take contract to supply 650,000 MTPY of wood pellets starting in
2022 and continuing through 2026.

Our sales strategy continues to be to fully contract the production
capacity of the Partnership with a diversified, strong credit quality
customer base. The Partnership’s current production capacity is matched
with a portfolio of firm off-take contracts that has a weighted-average
remaining term of 8.5 years and a $6.3 billion product sales backlog as
of August 1, 2018, which includes the recently executed contract with
Drax. Assuming all volumes under the firm and contingent off-take
contracts held by the Partnership, our sponsor, and its joint ventures
were included, the weighted-average remaining term and product sales
backlog would increase to 11.7 years and $12.2 billion, respectively.
The Partnership expects to have the opportunity to acquire these
contracts from our sponsor and its joint ventures.

The strong growth expected in global demand for industrial-grade wood
pellets is demonstrated by several recent significant events in the
established European market and the rapidly developing Asian market:

• In June, the European Commission, the European Council, and the
  European Parliament announced the agreement of key policy terms of the
  Renewable Energy Directive II framework, including a binding EU-wide
  target share for renewables of 32 percent in the energy mix by 2030,
  up from the target of 20 percent by 2020. The agreement also
  reconfirmed that energy generated from biomass counts towards the
  renewable energy target and is eligible for support mechanisms.
• Germany recently established a highly anticipated official task force,
  the Special Commission on Growth, Structural Economic Change and
  Employment, which will determine the approach for the phase out of
  coal-fired generation. Germany needs to stop using coal to generate
  electricity in order to reach its goal of becoming greenhouse
  gas-neutral by mid-century.
• In July, the Japanese government approved the country’s fifth
  Strategic Energy Plan prepared by the Ministry of Economy, Trade, and
  Industry. In addition to confirming renewable energy’s target share of
  22 to 24 percent in Japan’s 2030 energy mix, the plan designated
  renewables, including biomass, as a main source of power generation,
  indicating a major shift in government policy that recognizes
  renewable energy’s role as a baseload power source.
• In the UK, the National Infrastructure Commission, in its recently
  published National Infrastructure Assessment, called for renewable
  generation to make up 50 percent of the country’s electricity systems
  by 2030 and recommended limited government support for nuclear
  generation, which currently makes up approximately 18 percent of total
  electricity generated.

Sponsor Activity

The initial joint venture (the “First Hancock JV”) between affiliates of
our sponsor and John Hancock Life Insurance Company (U.S.A.) (“John
Hancock”) continues to construct the 600,000 MTPY production plant in
Hamlet, North Carolina (the “Hamlet plant”). The First Hancock JV
expects the Hamlet plant will be operational in the first half of 2019.

Our sponsor’s new joint venture with John Hancock (the “Second Hancock
JV”) continues to invest incremental capital in the wood pellet
production plant in Greenwood, South Carolina (the “Greenwood plant”).
The plant currently produces wood pellets for the Partnership under a
take-or-pay off-take contract. The Second Hancock JV expects to increase
the Greenwood plant’s production capacity to 600,000 MTPY, subject to
receiving necessary permits.

The Second Hancock JV also continues to progress the development of a
deep-water marine terminal in Pascagoula, Mississippi and a wood pellet
production plant in Lucedale, Mississippi to serve growing demand from
Asian and European customers. The Second Hancock JV expects to make a
final investment decision on these facilities in late 2018 or early
2019. In addition, the Second Hancock JV recently executed option
agreements to potentially acquire development sites for wood pellet
production plants in Epes, Alabama and Taylorsville, Mississippi.

The Partnership expects to have the opportunity to acquire these assets
from our sponsor and its joint ventures with John Hancock.

Chesapeake Incident

As reported by the Partnership in a press release on June 28, 2018, the
Partnership’s marine export terminal in Chesapeake, Virginia returned to
operation following the previously reported fire incident (the
“Chesapeake Incident”), and the business continuity costs associated
with the incident have begun to wind down.

The Partnership continues to believe that substantially all of the costs
resulting from the incident will be recoverable through insurance or
other contractual rights. The Partnership’s financial performance for
the second quarter of 2018 was impacted by business continuity costs
related to the incident that were not recovered during the second
quarter, but are expected to be recovered in subsequent quarters. The
Partnership has continued to meet every customer delivery required under
its off-take agreements since the Chesapeake Incident and, although the
specific quarterly timing of shipments have been and likely will be
affected by the incident, it expects to meet all of its contractual
requirements for the full year of 2018.

In addition to presenting our financial results in accordance with
accounting principles generally accepted in the United States (“GAAP”),
in certain cases we have provided financial results excluding the full
financial impact of the Chesapeake Incident. References herein to the
full financial impact of the Chesapeake Incident include the approximate
costs incurred during the second quarter of 2018 in connection with
emergency responses, disposal of wood pellet inventory, asset disposal
and repair, as well as associated business continuity costs, which
include incremental logistics costs and loss of margin on incremental
wood pellet production, offset by insurance recoveries received to date.

Presentation of Financial Results and Adoption of ASC 606

As of January 1, 2018, the Partnership adopted Financial Accounting
Standards Board Accounting Standards Codification 606 (“ASC 606”),
Revenue from Contracts with Customers, which requires entities to
recognize revenue when control of the promised goods or services is
transferred to customers in an amount that reflects the consideration to
which such entity expects to be entitled to in exchange for those goods
or services. Prior to the adoption of ASC 606, back-to-back transactions
to purchase and sell wood pellets, where title and risk of loss are
immediately transferred to the ultimate purchaser, were recorded in
“other revenue,” net of costs paid to third-party suppliers. Pursuant to
ASC 606, the Partnership now recognizes revenue from such transactions
on a gross basis in “product sales.”

Unless otherwise indicated, the financial results for the three and six
months ended June 30, 2018 presented in this release are prepared on
this basis.

Conference Call

We will host a conference call with executive management related to our
second quarter 2018 results and a more detailed market update at
10:00 a.m. (Eastern Time) on Thursday, August 9, 2018. Information on
how interested parties may listen to the conference call is available on
the Investor Relations page of our website (www.envivabiomass.com).
A replay of the conference call will be available on our website after
the live call concludes.

About Enviva Partners, LP

Enviva Partners, LP (NYSE: EVA) is a publicly traded master limited
partnership that aggregates a natural resource, wood fiber, and
processes it into a transportable form, wood pellets. The Partnership
sells a significant majority of its wood pellets through long-term,
take-or-pay agreements with creditworthy customers in the United Kingdom
and Europe. The Partnership owns and operates six plants with a combined
production capacity of nearly three million metric tons of wood pellets
per year in Virginia, North Carolina, Mississippi, and Florida. In
addition, the Partnership exports wood pellets through its owned marine
terminal assets at the Port of Chesapeake, Virginia, and the Port of
Wilmington, North Carolina and from third-party marine terminals in
Mobile, Alabama and Panama City, Florida.

To learn more about Enviva Partners, LP, please visit our website at www.envivabiomass.com.

Notice

This press release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b)(4). Brokers and nominees should treat 100
percent of the Partnership’s distributions to non-U.S. investors as
being attributable to income that is effectively connected with a United
States trade or business. Accordingly, the Partnership’s distributions
to non-U.S. investors are subject to federal income tax withholding at
the highest applicable effective tax rate.

Non-GAAP Financial Measures

We use adjusted gross margin per metric ton, adjusted EBITDA, and
distributable cash flow to measure our financial performance.

Adjusted Gross Margin per Metric Ton

We define adjusted gross margin as gross margin excluding asset
disposals and depreciation and amortization included in cost of goods
sold. We believe adjusted gross margin per metric ton is a meaningful
measure because it compares our revenue-generating activities to our
operating costs for a view of profitability and performance on a per
metric ton basis. Adjusted gross margin per metric ton will primarily be
affected by our ability to meet targeted production volumes and to
control direct and indirect costs associated with procurement and
delivery of wood fiber to our production plants and the production and
distribution of wood pellets.

Adjusted EBITDA

We define adjusted EBITDA as net income or loss excluding depreciation
and amortization, interest expense, income tax expense, early retirement
of debt obligations, non-cash unit compensation expense, asset
impairments and disposals, changes in the fair value of derivative
instruments, and certain items of income or loss that we characterize as
unrepresentative of our ongoing operations, including certain expenses
incurred related to the Chesapeake Incident (consisting of emergency
response expenses, expenses related to the disposal of inventory, and
asset disposal and repair costs, offset by insurance recoveries).
Adjusted EBITDA is a supplemental measure used by our management and
other users of our financial statements, such as investors, commercial
banks, and research analysts, to assess the financial performance of our
assets without regard to financing methods or capital structure.

Distributable Cash Flow

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

Adjusted gross margin per metric ton, adjusted EBITDA, and distributable
cash flow are not financial measures presented in accordance with GAAP.
We believe that the presentation of these non-GAAP financial measures
provides useful information to investors in assessing our financial
condition and results of operations. Our non-GAAP financial measures
should not be considered as alternatives to the most directly comparable
GAAP financial measures. Each of these non-GAAP financial measures has
important limitations as an analytical tool because they exclude some,
but not all, items that affect the most directly comparable GAAP
financial measures. You should not consider adjusted gross margin per
metric ton, adjusted EBITDA, or distributable cash flow in isolation 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 other companies, thereby diminishing
their utility.

The following tables present a reconciliation of adjusted gross margin
per metric ton, adjusted EBITDA, and distributable cash flow to the most
directly comparable GAAP financial measures, as applicable, for each of
the periods indicated.

		Three Months Ended June 30,							Six Months Ended June 30,
		2018				2017 (Recast)			2018				2017 (Recast)
		(in thousands, except per metric ton)
Reconciliation of gross margin to adjusted gross margin per metric ton:
Metric tons sold			699				628			1,347				1,251
Gross margin		$	16,316			$	16,331		$	11,775			$	32,699
Loss on disposal of assets			244				2,005			244				2,005
Depreciation and amortization			9,818				10,039			19,122				19,397
Adjusted gross margin		$	26,378			$	28,375		$	31,141			$	54,101
Adjusted gross margin per metric ton		$	37.74			$	45.18		$	23.12			$	43.25
		Three Months Ended June 30,							Six Months Ended June 30,
		2018				2017 (Recast)			2018				2017 (Recast)
		(in thousands)
Reconciliation of distributable cash flow and adjusted EBITDA to net income (loss):
Net income (loss)		$	3,544			$	1,497		$	(15,791	)		$	1,452
Add:
Depreciation and amortization			10,031				10,044			19,439				19,406
Interest expense			9,047				7,710			17,692				15,417
Non-cash unit compensation expense			2,480				1,566			3,823				3,280
Asset impairments and disposals			244				1,981			244				2,005
Change in the fair value of derivative instruments			(3,463	)			—			(2,694	)			—
Chesapeake Terminal Event, net			(804	)			—			15,786				—
Transaction expenses			(7	)			551			146				3,083
Adjusted EBITDA			21,072				23,349			38,645				44,643
Less:
Interest expense, net of amortization of debt issuance costs, debt premium and original issue discount			8,772				7,323			17,145				14,648
Maintenance capital expenditures			1,226				1,561			1,614				2,013
Distributable cash flow attributable to Enviva Partners, LP			11,074				14,465			19,886				27,982
Less: Distributable cash flow attributable to incentive distribution rights			1,400				669			2,664				1,206
Distributable cash flow attributable to Enviva Partners, LP limited partners		$	9,674			$	13,796		$	17,222			$	26,776
Cash distributions declared attributable to Enviva Partners, LP limited partners		$	16,682						$	33,151
Distribution coverage ratio			0.58							0.52

Cautionary Note Concerning Forward-Looking Statements

Certain statements and information in this press release, including
those concerning our future results of operations, acquisition
opportunities, and distributions, may constitute “forward-looking
statements.” The words “believe,” “expect,” “anticipate,” “plan,”
“intend,” “foresee,” “should,” “would,” “could,” or other similar
expressions are intended to identify forward-looking statements, which
are generally not historical in nature. These forward-looking statements
are based on the Partnership’s current expectations and beliefs
concerning future developments and their potential effect on the
Partnership. Although management believes that these forward-looking
statements are reasonable as and when made, there can be no assurance
that future developments affecting the Partnership will be those that it
anticipates. The forward-looking statements involve significant risks
and uncertainties (some of which are beyond the Partnership’s control)
and assumptions that could cause actual results to differ materially
from the Partnership’s historical experience and its present
expectations or projections. Important factors that could cause actual
results to differ materially from forward-looking statements include,
but are not limited to: (i) the volume and quality of products that we
are able to produce or source and sell, which could be adversely
affected by, among other things, operating or technical difficulties at
our plants or deep-water marine terminals; (ii) the prices at which we
are able to sell our products; (iii) failure of the Partnership’s
customers, vendors, and shipping partners to pay or perform their
contractual obligations to the Partnership; (iv) the creditworthiness of
our contract counterparties; (v) the amount of low-cost wood fiber that
we are able to procure and process, which could be adversely affected
by, among other things, operating or financial difficulties suffered by
our suppliers; (vi) changes in the price and availability of natural
gas, coal, or other sources of energy; (vii) changes in prevailing
economic conditions; (viii) our inability to complete acquisitions,
including acquisitions from our sponsor, or to realize the anticipated
benefits of such acquisitions; (ix) inclement or hazardous environmental
hazards, including extreme precipitation and flooding; (x) fires,
explosions, or other accidents; (xi) changes in domestic and foreign
laws and regulations (or the interpretation thereof) related to
renewable or low-carbon energy, the forestry products industry, the
international shipping industry, or power generators; (xii) changes in
the regulatory treatment of biomass in core and emerging markets; (xiii)
our inability to acquire or maintain necessary permits or rights for our
production, transportation, or terminaling operations; (xiv) changes in
price and availability of transportation; (xv) changes in foreign
currency exchange or interest rates, and the failure of our hedging
arrangements to effectively reduce our exposure to the risks related
thereto; (xvi) risks related to our indebtedness; (xvii) our failure to
maintain effective quality control systems at our production plants and
deep-water marine terminals, which could lead to the rejection of our
products by our customers; (xviii) changes in the quality specifications
for our products that are required by our customers; (xix) labor
disputes; (xx) the effects of the anticipated exit of the United Kingdom
from the European Union on our and our customers’ businesses; (xxi) our
ability to borrow funds and access capital markets; (xxii) our
mis-estimation of the amounts and the timing of the costs the
Partnership has incurred and will incur as result of the Chesapeake
Incident; and (xxiii) our ability to recover costs associated with the
Chesapeake Incident fully and on a timely basis, including through
claims under our insurance policies and the exercise of our other
contractual rights.

For additional information regarding known material factors that could
cause the Partnership’s actual results to differ from projected results,
please read its filings with the U.S. Securities and Exchange
Commission, including the Annual Report on Form 10-K and the Quarterly
Reports on Form 10-Q most recently filed with the SEC. Readers are
cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date thereof. The Partnership undertakes no
obligation to publicly update or revise any forward-looking statements
after the date they are made, whether as a result of new information,
future events, or otherwise.

Financial Statements

ENVIVA PARTNERS, LP AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except number of units)
		June 30, 2018				December 31, 2017
Assets		(unaudited)
Current assets:
Cash and cash equivalents		$	13,790			$	524
Accounts receivable, net of allowance for doubtful accounts of $0 as of June 30, 2018 and December 31, 2017			45,351				79,185
Related-party receivables			5,346				5,412
Inventories			36,175				23,536
Prepaid expenses and other current assets			2,680				1,006
Total current assets			103,342				109,663
Property, plant and equipment, net of accumulated depreciation of $135.6 million as of June 30, 2018 and $117.1 million as of December 31, 2017			553,240				562,330
Intangible assets, net of accumulated amortization of $10.5 million as of June 30, 2018 and $10.3 million as of December 31, 2017			—				109
Goodwill			85,615				85,615
Other long-term assets			6,235				2,394
Total assets		$	748,432			$	760,111
Liabilities and Partners’ Capital
Current liabilities:
Accounts payable		$	15,620			$	7,554
Related-party payables			25,617				26,398
Accrued and other current liabilities			33,736				29,363
Related-party accrued liabilities			604				—
Current portion of interest payable			5,029				5,029
Current portion of long-term debt and capital lease obligations			7,168				6,186
Total current liabilities			87,774				74,530
Long-term debt and capital lease obligations			422,372				394,831
Related-party long-term payable			74,000				74,000
Long-term interest payable			950				890
Other long-term liabilities			4,710				5,491
Total liabilities			589,806				549,742
Commitments and contingencies
Partners’ capital:
Limited partners:
Common unitholders—public (14,567,746 and 13,073,439 units issued and outstanding at June 30, 2018 and December 31, 2017, respectively)			214,009				224,027
Common unitholder—sponsor (11,905,138 and 1,347,161 units issued and outstanding at June 30, 2018 and December 31, 2017, respectively)			78,504				16,050
Subordinated unitholder—sponsor (no units issued and outstanding at June 30, 2018 and 11,905,138 units issued and outstanding at December 31, 2017)			—				101,901
General Partner (no outstanding units)			(133,821	)			(128,569	)
Accumulated other comprehensive loss			(66	)			(3,040	)
Total Enviva Partners, LP partners’ capital			158,626				210,369
Total liabilities and partners’ capital		$	748,432			$	760,111

ENVIVA PARTNERS, LP AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per unit amounts)
(Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017 (Recast)				2018				2017 (Recast)
Product sales		$	129,674			$	121,673			$	252,472			$	240,720
Other revenue			2,427				5,874				5,430				9,270
Net revenue			132,101				127,547				257,902				249,990
Cost of goods sold, excluding depreciation and amortization			105,723				99,172				226,761				195,889
Loss on disposal of assets			244				2,005				244				2,005
Depreciation and amortization			9,818				10,039				19,122				19,397
Total cost of goods sold			115,785				111,216				246,127				217,291
Gross margin			16,316				16,331				11,775				32,699
General and administrative expenses			7,287				6,870				14,091				15,633
Income (loss) from operations			9,029				9,461				(2,316	)			17,066
Other income (expense):
Interest expense			(9,047	)			(7,710	)			(17,692	)			(15,417	)
Other income (expense)			3,562				(254	)			4,217				(197	)
Total other expense, net			(5,485	)			(7,964	)			(13,475	)			(15,614	)
Net income (loss)			3,544				1,497				(15,791	)			1,452
Less net loss attributable to noncontrolling partners’ interests			—				1,196				—				2,515
Net income (loss) attributable to Enviva Partners, LP		$	3,544			$	2,693			$	(15,791	)		$	3,967
Less: Pre-acquisition loss from operations of Enviva Port of Wilmington, LLC Drop-Down allocated to General Partner			—				(1,169	)			—				(2,430	)
Enviva Partners, LP partners’ interest in net income (loss)		$	3,544			$	3,862			$	(15,791	)		$	6,397
Net income (loss) per limited partner common unit:
Basic		$	0.08			$	0.12			$	(0.70	)		$	0.20
Diluted		$	0.08			$	0.11			$	(0.70	)		$	0.19
Net income (loss) per limited partner subordinated unit:
Basic		$	0.08			$	0.12			$	(0.70	)		$	0.20
Diluted		$	0.08			$	0.12			$	(0.70	)		$	0.20
Weighted-average number of limited partner units outstanding:
Common — basic			18,597				14,405				16,518				14,392
Common — diluted			19,728				15,359				16,518				15,275
Subordinated — basic and diluted			7,804				11,905				9,855				11,905

ENVIVA PARTNERS, LP AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Six Months Ended June 30,
		2018				2017 (Recast)
Cash flows from operating activities:
Net (loss) income		$	(15,791	)		$	1,452
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization			19,439				19,406
Amortization of debt issuance costs, debt premium and original issue discount			548				768
General and administrative expense incurred by the First Hancock JV prior to Enviva Port of Wilmington, LLC Drop-Down
			—				821
Loss on disposal of assets			244				2,005
Unit-based compensation			3,823				3,280
Fair value changes in derivatives			(2,923	)			238
Unrealized loss on foreign currency transactions			29				—
Change in operating assets and liabilities:
Accounts receivable, net			33,806				24,757
Related-party receivables			66				(3,042	)
Prepaid expenses and other assets			(297	)			(157	)
Assets held for sale			—				(72	)
Inventories			(12,021	)			1,103
Other long-term assets			—				48
Derivatives			(947	)			(1,335	)
Accounts payable, accrued liabilities and other current liabilities			8,436				(4,110	)
Related-party payables			(3,445	)			1,011
Accrued interest			60				(104	)
Other current liabilities			—				(288	)
Other long-term liabilities			206				377
Net cash provided by operating activities			31,233				46,158
Cash flows from investing activities:
Purchases of property, plant and equipment			(5,879	)			(15,912	)
Insurance proceeds from property loss			1,130				—
Net cash used in investing activities			(4,749	)			(15,912	)
Cash flows from financing activities:
Principal payments on debt and capital lease obligations			(2,984	)			(2,436	)
Cash paid related to debt issuance costs			—				(209	)
Proceeds from common unit issuance under At-the-Market Offering Program, net			241				1,715
Distributions to unitholders, distribution equivalent rights and incentive distribution rights holder			(36,469	)			(29,992	)
Payment to General Partner to purchase affiliate common units for Long-Term Incentive Plan vesting			(2,341	)			—
Payment for withholding tax associated with Long-Term Incentive Plan vesting			(1,665	)			—
Proceeds and payments on revolving credit commitments			30,000				(6,500	)
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
			—				6,139
Net cash used in financing activities			(13,218	)			(29,631	)
Net increase in cash, cash equivalents and restricted cash			13,266				615
Cash, cash equivalents and restricted cash, beginning of period			524				466
Cash, cash equivalents and restricted cash, end of period		$	13,790			$	1,081

ENVIVA PARTNERS, LP AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (continued)
(In thousands)
(Unaudited)
		Six Months Ended June 30,
		2018			2017 (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		$	7,682		$	12,173
Property, plant and equipment acquired under capital lease obligations			960			1,124
Property, plant and equipment transferred from inventories			2			260
Distributions included in liabilities			1,056			1,044
Withholding tax payable associated with Long-Term Incentive Plan vesting			2,715			—
Conversion of subordinated units to common units			78,504			—
Depreciation capitalized to inventories			1,075			61
Supplemental information:
Interest paid		$	17,143		$	14,692