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Segmented Information
 6 Months Ended 12 Months Ended
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