Related-Party Transactions | Related-Party Transactions Related-party amounts included on the unaudited condensed consolidated statements of operations were as follows: Three Months Ended March 31, 2021 2020 Other revenue $ — $ 606 Cost of goods sold 30,442 33,617 General and administrative expenses 8,770 7,689 Management Services Agreements Enviva Partners, LP and the Hamlet JV are each parties to separate management services agreements (“MSA” or “MSAs”) with Enviva Management Company, LLC, a Delaware limited liability company and wholly owned subsidiary of our sponsor (together with its affiliates that provide services to us, as applicable, “Enviva Management Company”). Enviva Management Company provides us with operations, general administrative, management and other services. The MSAs include rent and related amounts for noncancelable operating leases for office space in Maryland and North Carolina held by our sponsor. We believe the costs allocated to us have been made on a reasonable basis and are the best estimate of the costs that we would have incurred on a stand-alone basis. Enviva Partners reimburses Enviva Management Company for all direct or indirect internal or third-party expenses it incurs in connection with the provision of such services. Under the Hamlet JV’s MSA (the “Hamlet JV MSA”), the Hamlet JV pays an annual management fee to Enviva Management Company; to the extent allocated costs exceed the annual management fee, the additional costs are recorded with an increase to partners’ capital. In connection with the Hamlet Drop-Down, Enviva Management Company waived the Hamlet JV’s obligation to pay approximately $2.7 million of management fees payable to Enviva Management Company from the date thereof until July 1, 2020 (the “Hamlet JV MSA Fee Waiver”). Related-party amounts included on the unaudited condensed consolidated balance sheets under our MSAs were as follows: March 31, 2021 December 31, 2020 Finished goods inventory $ 3,301 $ 907 Related-party payables 8,419 8,650 Related-party amounts included on the unaudited condensed consolidated statements of operations under our MSAs were as follows: Three Months Ended March 31, 2021 2020 Cost of goods sold $ 24,301 $ 13,260 General and administrative expenses 8,770 7,689 During the three months ended March 31, 2021 and 2020, $0.7 million of fees expensed under the Hamlet JV MSA were waived and recorded as an increase to partners’ capital. Drop-Down Agreements Greenwood Drop-Down On the date of the Greenwood Drop-Down: • We entered into an agreement with our sponsor, pursuant to which our sponsor agreed to reimburse us for any construction costs incurred for the planned expansion of the Greenwood plant in excess of $28.0 million (the “Greenwood Make-Whole Agreement”). • We entered into an agreement with Enviva Management Company pursuant to which (1) Enviva Management Company waived our obligation to pay an aggregate of approximately $37.0 million in management services and other fees payable under our management services agreement with Enviva Management Company for the period from July 1, 2020 through the fourth quarter of 2021 and (2) Enviva Management Company will waive our obligation to pay certain management services and other fees during 2022 unless and until the Greenwood plant’s production volumes equal or exceed 50,000 metric tons (“MT”) in any calendar month, in each case, to provide cash flow support to us during the planned expansion of the Greenwood plant (the “Third EVA MSA Fee Waiver”). Pursuant to the Third EVA MSA Fee Waiver, during the three months ended March 31, 2021, $8.0 million was recorded as an increase to partners’ capital consisting of expenses waived under the agreement. Hamlet Drop-Down On the date of the Hamlet Drop-Down: • We entered into an agreement with our sponsor, pursuant to which (1) our sponsor agreed to guarantee certain cash flows from the Hamlet plant until June 30, 2020, (2) our sponsor agreed to reimburse us for construction cost overruns in excess of budgeted capital expenditures for the Hamlet plant, subject to certain exceptions, (3) we agreed to pay to our sponsor quarterly incentive payments for any wood pellets produced by the Hamlet plant in excess of forecast production levels through June 30, 2020 and (4) our sponsor agreed to retain liability for certain claims payable, if any, by the Hamlet JV (the “Hamlet Make-Whole Agreement”). • We entered into an agreement with Enviva Management Company to waive our obligation to pay an aggregate of approximately $13.0 million in fees payable under our MSA with Enviva Management Company (the “EVA MSA”) with respect to the period from the date of the Hamlet Drop-Down through the second quarter of 2020 (the “First EVA MSA Fee Waiver”). • The Hamlet JV entered into an interim services agreement (the “ISA”) with Enviva Hamlet Operator, LLC, a wholly owned subsidiary of our sponsor (“Hamlet Operator”), pursuant to which Hamlet Operator, as an independent contractor, agreed to manage, operate, maintain and repair the Hamlet plant and provide other services to the Hamlet JV for the period from July 1, 2019 through June 30, 2020 in exchange for a fixed fee per MT of wood pellets produced by the Hamlet plant during such period and delivered at place to the Wilmington terminal. Under and during the term of the ISA, Hamlet Operator agreed to (1) pay all operating and maintenance expenses at the Hamlet plant, (2) cover all reimbursable general and administrative expenses associated with the Hamlet plant and (3) pay other costs and expenses incurred by the Hamlet plant to produce and sell the wood pellets delivered to the Wilmington terminal from the Hamlet plant. Our sponsor guaranteed all obligations of Hamlet Operator under the ISA. The Hamlet Make-Whole Agreement, First EVA MSA Fee Waiver and ISA expired pursuant to their terms on June 30, 2020. For the three months ended March 31, 2020, $2.5 million of fees expensed under the Hamlet JV MSA and waived under the First EVA MSA Fee Waiver were recorded as an increase to partners’ capital. For the three months ended March 31, 2020, cost of goods sold included $10.6 million net of a cost of cover deficiency fee from our sponsor pursuant to the Hamlet Make-Whole Agreement as a result of Hamlet Operator’s failure to meet specified production levels, offset by the agreed-upon price due to Hamlet Operator for the wood pellets produced by the Hamlet plant that we sold. As of March 31, 2021 and December 31, 2020, related-party receivables included $0.4 million and $12.3 million related to the ISA. Greenwood Contract We were party to a contract with Greenwood to purchase wood pellets produced by the Greenwood plant through March 2022 (the “Greenwood Contract”). The Greenwood Contract was terminated on the date of the Greenwood Drop-Down. During the three months ended March 31, 2020, we purchased $9.9 million of wood pellets from Greenwood and recorded a cost of cover deficiency fee of approximately $0.4 million as Greenwood was unable to satisfy certain commitments. As of March 31, 2020, of the net purchased amount of $9.5 million related to the Greenwood contract, $8.4 million was included in cost of goods sold and $1.1 million was included in finished goods inventory. Holdings TSA Prior to its termination on the date of the Greenwood Drop-Down, we were party to a long-term terminal services agreement with our sponsor (the “Holdings TSA”). The Holdings TSA was amended and assigned to Greenwood and provided for deficiency payments if quarterly minimum throughput requirements were not met. During the three months ended March 31, 2020, we recorded $0.6 million of deficiency fees from Greenwood, which was included in other revenue. Enviva FiberCo, LLC We purchase raw materials from Enviva FiberCo, LLC (“FiberCo”), a wholly owned subsidiary of our sponsor, including through a wood supply agreement that provided for deficiency fees in the event FiberCo did not satisfy certain volume commitments. Purchased raw materials net of cost of cover deficiency fees are included in cost of goods sold. Raw materials purchased during the three months ended March 31, 2021 were $6.0 million. No cost of cover deficiency fees were recognized during the three months ended March 31, 2021. During the three months ended March 31, 2020, included in cost of goods sold was $1.4 million of raw materials purchased. As of March 31, 2021, related-party payables of $0.8 million is included in related-party payables related to raw materials purchased from FiberCo. At December 31, 2020, related-party payables included $0.3 million related to raw materials purchased from FiberCo. Hamlet JV Revolver As of March 31, 2021 and December 31, 2020, the Hamlet JV had a revolver outstanding balance to Enviva, LP, of $43.9 million and $41.7 million, respectively, both of which were eliminated upon consolidation. Railcar Subleases Effective February 2021, we agreed to sublease certain railcars from Enviva Pellets Lucedale, LLC, a wholly owned subsidiary of our sponsor. The sublease agreements terminate no later than August 30, 2021. During the three months ended March 31, 2021, cost of goods sold includes expense related to the railcar subleases and railcar deliveries of $0.1 million. At March 31, 2021, we had $0.1 million included in related-party payables. |