Enviva also announced the signing of a new 190,000 MTPY, 20-year take-or-pay off-take contract to supply a large, creditworthy Japanese trading house with deliveries commencing in 2024.

As a result of the Simplification Transaction and the newly announced contracts, Enviva's total weighted-average remaining term of off-take contracts is approximately 14.5 years, with a total product sales backlog of over $21 billion.

Key drivers to our robust growth outlook include the increased requirements from regulators and policy makers and commitments from large industrial manufacturers around the world to decarbonize greenhouse-gas ("GHG") intensive industries like steel, chemicals, lime, cement, and aviation fuels. Conclusions from a market sizing and adoption study we recently commissioned from a leading international consultancy suggest that these segments are expected to increase from virtually zero today, to as much as 29 million MTPY of industrial-grade wood pellets by 2030.

In addition to anticipated demand driven by net-zero targets, the current energy commodity environment, in which coal, crude oil, and natural gas prices have surged, has increased the pace of conversations and negotiations with several large, creditworthy counterparties. Since November 2020, European Union carbon prices have more than doubled, allowing biomass to be more profitable in energy generation than carbon-intensive feedstocks such as coal and natural gas, even in markets where there are no direct incentives or subsidies for renewable energy generation. Today, carbon prices have stabilized around the 60 EUR/MT mark, and given this attractive economic backdrop, we have seen accelerated momentum around fuel-switching decisions.

Asset Update

As part of the Simplification Transaction, Enviva acquired the fully contracted Epes plant, which is currently under development. We expect to commence construction in early 2022, with an in-service date scheduled for mid-2023. Epes is designed and permitted to produce more than 1 million MTPY of wood pellets, which would make it the largest wood pellet production plant in the world.

Enviva also acquired a prospective production plant in Bond, Mississippi ("Bond"), which is being developed to produce between 750,000 and more than 1 million MTPY of wood pellets. Bond's proximity to the Port of Pascagoula positions us to transport its production efficiently by truck from the plant to our terminal at the Port. We expect construction of Bond to commence once Epes is operational, but timing of construction could be expedited depending on the schedule and delivery requirements of additional off-take contract opportunities under negotiation and general market conditions.

Shifting to Enviva's current fleet, construction on the Lucedale plant continues, and we expect commissioning to commence during the fourth quarter of 2021. Our terminal at the Port of Pascagoula also remains on track to receive, store, and load production from the Lucedale plant once the plant is operational.

In respect of Enviva's expansion projects, the Northampton expansion is complete and the Southampton expansion is currently in the commissioning process. Construction on the Greenwood expansion is also nearing completion. Further, we have made significant investments in the "Multi-Plant Expansions", commencing at Enviva's Sampson and Hamlet plants, with Cottondale to follow.

Third Quarter Update

For the third quarter of 2021, our estimate for net income ranges from a $0.5 million net loss to $3.5 million of net income. Adjusted EBITDA ranges from $61 million to $65 million, representing an increase of 16% at the midpoint as compared to the third quarter of 2020 and a 29% increase over the second quarter of 2021. In the third quarter of 2021, our contractors and supply chain partners experienced labor-related and other challenges associated with COVID-19 that had a temporal, but more pronounced than anticipated, impact on our operations and project execution schedule. We believe that these challenges were short-term and isolated in nature and based on the actions we have taken and the plans we have in place, we believe these issues are beginning to be behind us. Accordingly, based on our expected financial results for the third quarter and year ended December 31, 2021, and without considering the impact of the Simplification Transaction, we believe we would have delivered financial results consistent with the previously announced guidance range for adjusted EBITDA, albeit at the lower end of the range.

Guidance Update

$ millions, unless noted                                  2021*           2022 
------------------------------------------------  -------------  ------------- 
Net Income                                          4.0 -- 14.0   42.0 -- 67.0 
------------------------------------------------  -------------  ------------- 
Adjusted EBITDA                                   225.0 - 235.0  275.0 - 300.0 
------------------------------------------------  -------------  ------------- 
Interest Expense                                           48.0           56.0 
------------------------------------------------  -------------  ------------- 
Maintenance Capex                                          14.0           10.0 
------------------------------------------------  -------------  ------------- 
DCF                                               165.0 - 175.0  210.0 - 235.0 
------------------------------------------------  -------------  ------------- 
Leverage Ratio                                     3.5x -- 4.0x   3.5x -- 4.0x 
------------------------------------------------  -------------  ------------- 
Dividend per Common Share                           $3.30/share    $3.62/share 
------------------------------------------------  -------------  ------------- 
Dividend Coverage Ratio (on a forward-looking        >1.0 times     >1.0 times 
 annual cash basis) 
------------------------------------------------  -------------  ------------- 

*The 2021 measures set forth in the table above include the expected post-closing results of the assets and operations acquired as part of the Simplification Transaction, but do not reflect a potential recast of our historical results of operations that may result from the Simplification Transaction

For full-year 2021, Enviva expects to generate net income in the range of $4 million to $14 million and adjusted EBITDA of between $225 million and $235 million and to distribute $3.30 per share. As a result of the GP Buy-in, now included in fourth quarter of 2021 estimates are approximately $15 million to $20 million of selling, general and administrative expenses ("SG&A") associated with market and asset development activities.

For full-year 2022, Enviva expects to generate net income in the range of $42 million to $67 million and adjusted EBITDA in the range of $275 million to $300 million, and to maintain a quarterly dividend of $0.905 per share, for a total of $3.62 in dividends declared per share for the year. We expect net income to increase by close to 6 times for 2022 as compared to 2021, using the midpoint of guidance ranges. We expect adjusted EBITDA to increase by approximately 25% for 2022 as compared to 2021, using the midpoint of guidance ranges.

Our forecasted dividend coverage ratio is calculated on a forward-looking annual cash basis, meaning it does not take into account dividends related to the 9 million DRIP shares issued as part of the Simplification Transaction.

The above guidance amounts for 2022 include additional corporate, commercial, sales and marketing, communications, public affairs, sustainability, and development expenses associated with the acquisition of Holdings, along with certain one-time costs associated with the transactions. For full-year 2022, we expect SG&A related to the GP Buy-in to range from $37 million to $43 million. Actual amounts reported for SG&A may vary due to the level of capitalization of development activities associated with new plant construction and plant expansions. Importantly, we expect SG&A expenses related to the acquisition of Holdings to decline over time as we benefit from synergies and execute streamlining initiatives, with a desire to reduce these expenses by approximately $5 million annually commencing in 2023.

In connection with the GP Buy-in, the existing management services agreement fee waivers and other Holdings support agreements associated with EVA's earlier acquisitions of the Greenwood and Lucedale plants and Pascagoula terminal were consolidated, fixed, and novated to the former owners of Holdings. As a result, under the consolidated support agreement, EVA will receive quarterly payments in an aggregate amount of $55.5 million through the fourth quarter of 2023.

"We are very proud to have been a fundamental part of Enviva's continued success since our initial investment in 2010," said Pierre Lapeyre and David Leuschen, Co-Founders of Riverstone Holdings LLC, the former financial sponsor of Holdings, which was acquired by Enviva as part of the GP Buy-in. "Global commitments to reduce climate change require patient, thoughtful, and creative private capital providers. Riverstone and its decarbonization platform are focused on continuing to create further innovative and attractive investment opportunities like Enviva. We look forward to working with the company in the future to build additional durable shareholder value."