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Segmented Information | 6 Months Ended | 12 Months Ended
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Jun. 30, 2022 | Dec. 31, 2021
Text Block [Abstract] |  |
Segmented Information | NOTE 19. SEGMENTED INFORMATION Enerflex has identified three reportable operating segments as outlined below, each supported by the Corporate head office. Corporate overheads are allocated to the operating segments based on revenue. In assessing its operating segments, the Company considered economic characteristics, the nature of products and services provided, the nature of production processes, the types of customers for its products and services, and distribution methods used. For each of the operating segments, the Chief Operating Decision Maker reviews internal management reports on at least a quarterly basis. For the six months ended June 30, 2022, the Company had no individual customers which accounted for more than 10 percent of its revenue (June 30, 2021 – none). The following summary describes the operations of each of the Company’s reportable segments:
| • |  | USA generates revenue from manufacturing natural gas compression, refrigeration, processing, and electric power equipment, including custom and standard compression packages and modular natural gas processing equipment and refrigeration systems, in addition to generating revenue from mechanical services and parts, and maintenance solutions, and contract compression rentals;
| • |  | ROW generates revenue from manufacturing (focusing on large-scale process equipment), after-market services, including parts and components, as well as operations, maintenance, and overhaul services, and rentals of compression and processing equipment. The ROW segment has been successful in securing build-own-operate-maintain and integrated turnkey projects; and
| • |  | Canada generates revenue from manufacturing both custom and standard natural gas compression, processing, and electric power equipment, as well as providing after-market mechanical service, parts, and compression and power generation rentals.
The accounting policies of the reportable operating segments are the same as those described in the summary of significant accounting policies.
Three months ended June 30, |  | USA |  |  | Rest of World |  |  | Canada |  |  | Total |
| 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Segment revenue |  | $ | 226,087 |  |  | $ | 120,754 |  |  | $ | 104,125 |  |  | $ | 65,429 |  |  | $ | 73,205 |  |  | $ | 39,128 |  |  | $ | 403,417 |  |  | $ | 225,311 |
Intersegment revenue |  |  | (28,733 | ) |  |  | (15,095 | ) |  |  | (111 | ) |  |  | (34 | ) |  |  | (2,496 | ) |  |  | (5,675 | ) |  |  | (31,340 | ) |  |  | (20,804 | )
Revenue |  | $ | 197,354 |  |  | $ | 105,659 |  |  | $ | 104,014 |  |  | $ | 65,395 |  |  | $ | 70,709 |  |  | $ | 33,453 |  |  | $ | 372,077 |  |  | $ | 204,507 |
Revenue – Engineered Systems |  |  | 112,673 |  |  |  | 44,698 |  |  |  | 34,810 |  |  |  | 3,642 |  |  |  | 48,863 |  |  |  | 16,658 |  |  |  | 196,346 |  |  |  | 64,998 |
Revenue – Service |  |  | 53,105 |  |  |  | 37,195 |  |  |  | 31,861 |  |  |  | 24,668 |  |  |  | 20,873 |  |  |  | 15,767 |  |  |  | 105,839 |  |  |  | 77,630 |
Revenue – Energy Infrastructure |  |  | 31,576 |  |  |  | 23,766 |  |  |  | 37,343 |  |  |  | 37,085 |  |  |  | 973 |  |  |  | 1,028 |  |  |  | 69,892 |  |  |  | 61,879 |
Operating income (loss) 1 |  | $ | 14,044 |  |  | $ | 4,872 |  |  | $ | 7,217 |  |  | $ | 9,355 |  |  | $ | (1,018 | ) |  | $ | 3,518 |  |  | $ | 20,243 |  |  | $ | 17,745 |
Six months ended June 30, |  | USA |  |  | Rest of World |  |  | Canada |  |  | Total |
| 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Segment revenue |  | $ | 408,842 |  |  | $ | 205,719 |  |  | $ | 213,519 |  |  | $ | 135,946 |  |  | $ | 140,329 |  |  | $ | 90,757 |  |  | $ | 762,690 |  |  | $ | 432,422 |
Intersegment revenue |  |  | (64,024 | ) |  |  | (18,114 | ) |  |  | (189 | ) |  |  | (40 | ) |  |  | (3,331 | ) |  |  | (6,556 | ) |  |  | (67,544 | ) |  |  | (24,710 | )
Revenue |  | $ | 344,818 |  |  | $ | 187,605 |  |  | $ | 213,330 |  |  | $ | 135,906 |  |  | $ | 136,998 |  |  | $ | 84,201 |  |  | $ | 695,146 |  |  | $ | 407,712 |
Revenue – Engineered Systems |  |  | 190,305 |  |  |  | 73,938 |  |  |  | 84,102 |  |  |  | 12,084 |  |  |  | 96,370 |  |  |  | 51,208 |  |  |  | 370,777 |  |  |  | 137,230 |
Revenue – Service |  |  | 95,354 |  |  |  | 67,309 |  |  |  | 54,895 |  |  |  | 50,579 |  |  |  | 38,776 |  |  |  | 30,278 |  |  |  | 189,025 |  |  |  | 148,166 |
Revenue – Energy Infrastructure |  |  | 59,159 |  |  |  | 46,358 |  |  |  | 74,333 |  |  |  | 73,243 |  |  |  | 1,852 |  |  |  | 2,715 |  |  |  | 135,344 |  |  |  | 122,316 |
Operating income (loss) 1 |  | $ | 14,389 |  |  | $ | 5,238 |  |  | $ | 17,499 |  |  | $ | 14,083 |  |  | $ | (4,806 | ) |  | $ | 5,445 |  |  | $ | 27,082 |  |  | $ | 24,766 |
1 | The company did not receive any government grants during the three and six months ended June 30, 2022 (June 30, 2021 – $6.4 million and $10.5 million). Government grants are recorded in COGS and SG&A within the interim condensed consolidated statements of earnings in accordance with where the associated expenses were recognized.
|  | USA |  |  | Rest of World |  |  | Canada |  |  | Total |
|  | Jun. 30, 2022 |  |  | Dec. 31, 2021 |  |  | Jun. 30, 2022 |  |  | Dec. 31, 2021 |  |  | Jun. 30, 2022 |  |  | Dec. 31, 2021 |  |  | Jun. 30, 2022 |  |  | Dec. 31, 2021 |
Segment assets |  | $ | 1,030,299 |  |  | $ | 1,000,755 |  |  | $ | 694,574 |  |  | $ | 654,969 |  |  | $ | 560,449 |  |  | $ | 546,250 |  |  | $ | 2,285,322 |  |  | $ | 2,201,974 |
Goodwill |  |  | 156,970 |  |  |  | 154,437 |  |  |  | 322,707 |  |  |  | 323,466 |  |  |  | 88,367 |  |  |  | 88,367 |  |  |  | 568,044 |  |  |  | 566,270 |
Corporate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (560,480 | ) |  |  | (576,802 | )
Total segment assets |  | $ | 1,187,269 |  |  | $ | 1,155,192 |  |  | $ | 1,017,281 |  |  | $ | 978,435 |  |  | $ | 648,816 |  |  | $ | 634,617 |  |  | $ | 2,292,886 |  |  | $ | 2,191,442 |
| NOTE 34. SEGMENTED INFORMATION Enerflex has identified three reportable operating segments as outlined below, each supported by the Corporate head office. Corporate overheads are allocated to the operating segments based on revenue. In assessing its operating segments, the Company considered economic characteristics, the nature of products and services provided, the nature of production processes, the type of customer for its products and services, and distribution methods used. For each of the operating segments, the Chief Operating Decision Maker reviews internal management reports on at least a quarterly basis. For the year ended December 31, 2021, the Company had no individual customers which accounted for more than 10 percent of its revenue (For the year ended December 31, 2020, the Company had no individual customers which accounted for more than 10 percent of its revenue. For the year ended December 31, 2019, the Company recognized $262.5 million of revenue from one customer in the USA and Canada segments, which represented 12.8 percent of total consolidated revenue for the period. At December 31, 2019, amounts owing from the customer included in accounts receivable and contract assets was $68.0 million, which represented 12.0 percent of the total balance of accounts receivable and contract assets). The following summary describes the operations of each of the Company’s reportable segments:
| • |  | USA generates revenue from manufacturing natural gas compression, refrigeration, processing, and electric power equipment, including custom and standard compression packages and modular natural gas processing equipment and refrigeration systems, in addition to generating revenue from mechanical services and parts, operations and maintenance solutions, and contract compression rentals;
| • |  | Rest of World generates revenue from manufacturing (focusing on large-scale process equipment), after-market services, including parts and components, as well as operations, maintenance, and overhaul services, and rentals of compression and processing equipment. The Rest of World segment has been successful in securing build-own-operate-maintain and integrated turnkey projects; and
| • |  | Canada generates revenue from manufacturing both custom and standard natural gas compression, processing, and electric power equipment, as well as providing after-market mechanical service, parts, and compression and power generation rentals.
The accounting policies of the reportable operating segments are the same as those described in the summary of significant accounting policies.
|  | USA |  |  | Rest of World |  |  | Canada |  |  | Total |
Years ended December 31, |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Segment revenue |  | $ | 497,630 |  |  | $ | 649,133 |  |  | $ | 309,695 |  |  | $ | 353,210 |  |  | $ | 194,439 |  |  | $ | 247,390 |  |  | $ | 1,001,764 |  |  | $ | 1,249,733 |
Intersegment revenue |  |  | (27,247 | ) |  |  | (16,847 | ) |  |  | (138 | ) |  |  | (199 | ) |  |  | (14,223 | ) |  |  | (15,635 | ) |  |  | (41,608 | ) |  |  | (32,681 | )
Revenue |  | $ | 470,383 |  |  | $ | 632,286 |  |  | $ | 309,557 |  |  | $ | 353,011 |  |  | $ | 180,216 |  |  | $ | 231,755 |  |  | $ | 960,156 |  |  | $ | 1,217,052 |
Revenue – Engineered Systems |  |  | 218,558 |  |  |  | 390,178 |  |  |  | 22,500 |  |  |  | 40,485 |  |  |  | 113,069 |  |  |  | 167,903 |  |  |  | 354,127 |  |  |  | 598,566 |
Revenue – Service |  |  | 153,722 |  |  |  | 150,939 |  |  |  | 111,500 |  |  |  | 96,092 |  |  |  | 62,154 |  |  |  | 56,238 |  |  |  | 327,376 |  |  |  | 303,269 |
Revenue – Energy Infrastructure 1 |  |  | 98,103 |  |  |  | 91,169 |  |  |  | 175,557 |  |  |  | 216,434 |  |  |  | 4,993 |  |  |  | 7,614 |  |  |  | 278,653 |  |  |  | 315,217 |
Operating income 2 |  | $ | 14,442 |  |  | $ | 56,504 |  |  | $ | 36,250 |  |  | $ | 40,488 |  |  | $ | 3,599 |  |  | $ | 19,020 |  |  | $ | 54,291 |  |  | $ | 116,012 |
1 | Energy Infrastructure revenue for 2021 includes the recognition of revenue from a finance lease transaction in the fourth quarter of 2021 and 2020. Upon commencement of the renegotiated lease, the Company recognized the sale of the related rental assets and a corresponding finance lease receivable. Refer to Note 11 for further details on finance leases.
2 | In the year ended December 31, 2021, the Company recognized $16.4 million of government grants (December 31, 2020 – $19.6 million; December 31, 2019 – nil). The subsidies received have been recorded as a reduction in cost of goods sold and selling and administrative expenses within the consolidated statements of earnings in accordance with where the associated expenses were recognized.
|  | USA |  |  | Rest of World |  |  | Canada |  |  | Total |
Years ended December 31, |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Segment revenue |  | $ | 649,133 |  |  | $ | 1,243,760 |  |  | $ | 353,210 |  |  | $ | 354,680 |  |  | $ | 247,390 |  |  | $ | 518,042 |  |  | $ | 1,249,733 |  |  | $ | 2,116,482 |
Intersegment revenue |  |  | (16,847 | ) |  |  | (48,091 | ) |  |  | (199 | ) |  |  | (7,846 | ) |  |  | (15,635 | ) |  |  | (15,123 | ) |  |  | (32,681 | ) |  |  | (71,060 | )
Revenue |  | $ | 632,286 |  |  | $ | 1,195,669 |  |  | $ | 353,011 |  |  | $ | 346,834 |  |  | $ | 231,755 |  |  | $ | 502,919 |  |  | $ | 1,217,052 |  |  | $ | 2,045,422 |
Revenue – Engineered Systems |  |  | 390,178 |  |  |  | 947,451 |  |  |  | 40,485 |  |  |  | 76,813 |  |  |  | 167,903 |  |  |  | 424,239 |  |  |  | 598,566 |  |  |  | 1,448,503 |
Revenue – Service 1 |  |  | 150,939 |  |  |  | 172,130 |  |  |  | 96,092 |  |  |  | 111,357 |  |  |  | 56,238 |  |  |  | 67,505 |  |  |  | 303,269 |  |  |  | 350,992 |
Revenue – Energy Infrastructure 1,2 |  |  | 91,169 |  |  |  | 76,088 |  |  |  | 216,434 |  |  |  | 158,664 |  |  |  | 7,614 |  |  |  | 11,175 |  |  |  | 315,217 |  |  |  | 245,927 |
Operating income |  | $ | 56,504 |  |  | $ | 194,010 |  |  | $ | 40,488 |  |  | $ | 511 |  |  | $ | 19,020 |  |  | $ | 37,387 |  |  | $ | 116,012 |  |  | $ | 231,908 |
1 | Revenues from the operation and maintenance of BOOM contracts have been reclassified from the Service to Energy Infrastructure product line including $11,717 previously disclosed during the first quarter of 2020. For the year ended December 31, 2019 the amount reclassified was $43,594. Please refer to Note 23 for further details.
2 | Energy Infrastructure revenue for 2020 includes the recognition of revenue from a finance lease transaction in the fourth quarter of 2020. Upon commencement of the renegotiated leases, the Company recognized the sale of the related rental assets and a corresponding finance lease receivable. Refer to Note 11 for further details on finance leases.
|  | USA |  |  | Rest of World |  |  | Canada |  |  | Total |
As at December 31, |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Segment assets |  | $ | 1,000,755 |  |  | $ | 895,022 |  |  | $ | 654,969 |  |  | $ | 610,597 |  |  | $ | 546,250 |  |  | $ | 525,510 |  |  | $ | 2,201,974 |  |  | $ | 2,031,129 |
Goodwill |  |  | 154,437 |  |  |  | 155,094 |  |  |  | 323,466 |  |  |  | 332,567 |  |  |  | 88,367 |  |  |  | 88,367 |  |  |  | 566,270 |  |  |  | 576,028 |
Corporate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (576,802 | ) |  |  | (427,581 | )
Total segment assets |  | $ | 1,155,192 |  |  | $ | 1,050,116 |  |  | $ | 978,435 |  |  | $ | 943,164 |  |  | $ | 634,617 |  |  | $ | 613,877 |  |  | $ | 2,191,442 |  |  | $ | 2,179,576 |

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