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Segmented Information
 12 Months Ended
Dec. 31, 2022
Text Block 1 [Abstract]  
Segmented Information
NOTE 35. SEGMENTED INFORMATION
During the fourth quarter of 2022, the Company
re-assessed
its operating and reporting segments. Prior to this assessment, the Company’s operating and reporting segments were one and the same, with those segments being Canada, USA, and ROW. With the completion of the Exterran acquisition Management noted a change in how the CODM views the organization. On this basis, four operating segments have been identified with no change in the Canada and USA segments, while ROW has been bifurcated into LATAM and EH. For external reporting purposes, Enerflex’s reportable segments are as follows:
 
  •  
North America – comprised of operations in Canada and the USA;
 
  •  
Latin America – comprised of operations in Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico and Peru; and
 
  •  
Eastern Hemisphere – comprised of operations in the Middle East, Africa, Europe and Asia Pacific.
Each of the reporting segments are supported by the Corporate head office. Corporate overheads are allocated to the operating segments based on revenue. In assessing its reportable 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. These considerations factored into the decision to combine Canada and USA into one reporting segment. For each of the operating segments, the CODM reviews internal management reports on at least a quarterly basis.
Goodwill that was previously allocated to the ROW segment was distributed between the LATAM and EH segments on a basis of a relative fair value allocation. The fair value allocation was determined based on the
value-in-use
for LATAM and EH stand-alone segments and applying that percentage to the goodwill held in ROW.
For the year ended December 31, 2022, the Company had no individual customers which accounted for more than 10 percent of its revenue (December 31, 2021 - none).
The following summary describes the operations of each of the Company’s reportable segments:
 
  •  
NAM generates revenue from manufacturing natural gas infrastructure under contract, refrigeration, processing, and electric power equipment, including custom and standard compression packages and modular natural gas processing equipment, refrigeration systems and water treatment services, in addition to generating revenue from mechanical services and parts, and maintenance solutions, and operating our compression assets under contract for oil and gas and midstream customers;
 
  •  
LATAM generates revenue from operating our Energy Infrastructure assets under take or pay contracts, providing after-market services, including parts and components, as well as operations, maintenance, and overhaul services; and
 
  •  
EH generates revenue by operating our Energy Infrastructure assets under take or pay contracts, 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 accounting policies of the reportable operating segments are the same as those described in the summary of significant accounting policies.
 
The following tables provide certain financial information by geographic area.
Revenues and Operating Income
 
  Years ended December 31,    NAM                  LATAM                  EH                  Total              
  
2022
      2021     
2022
      2021     
2022
      2021     
2022
      2021  
                 
Segment revenue
   
$
      1,303,885
 
    $       680,062     
$
      221,628
 
    $       106,160     
$
      349,247
 
    $       203,585     
$
      1,874,760
 
    $       989,807  
                 
Intersegment revenue
   
 
(93,778)
 
      (29,463)     
 
(434)
 
      (95)     
 
(2,750)
 
      (93)     
 
(96,962)
 
      (29,651)  
                 
Revenue
   
$
1,210,107
 
    $ 650,599     
$
221,194
 
    $ 106,065     
$
346,497
 
    $ 203,492     
$
1,777,798
 
    $ 960,156  
                 
Revenue – Energy Infrastructure
   
 
141,900
 
      103,096     
 
129,723
 
      66,069     
 
109,464
 
      109,488     
 
381,087
 
      278,653  
                 
Revenue – After-Market Services
   
 
298,333
 
      215,876     
 
38,057
 
      24,158     
 
107,270
 
      87,342     
 
443,660
 
      327,376  
                 
Revenue – Engineered Systems
   
 
769,874
 
      331,627     
 
53,414
 
      15,838     
 
129,763
 
      6,662     
 
953,051
 
      354,127  
                 
Operating income (loss)
1
   
$
14,769
 
    $ 18,041     
$
(14,654)
 
    $ 6,575     
$
2,157
 
    $ 29,675     
$
2,272
 
    $ 54,291  
1
The company did not receive any government grants during the twelve months ended December 31, 2022 (December 31, 2021 – $16.4 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.
Segment Assets
 
 
  
NAM
 
  
LATAM
 
  
EH
 
  
Total
 
  As at December 31,
  
 
2022
 
  
 
2021
 
  
 
2022
 
  
 
2021
 
  
 
2022
 
  
 
2021
 
  
 
2022
 
  
 
2021
 
Segment assets
   
$
        1,638,195
 
    $         1,547,005     
$
        838,063
 
    $         214,340     
$
        831,652
 
    $         440,629     
$
        3,307,910
 
    $         2,201,974  
                 
Goodwill
1
   
 
224,992
 
      242,804     
 
89,264
 
     
85,622
     
 
365,121
 
      237,844     
 
679,377
 
      566,270  
                 
Corporate
   
 
-
 
      -     
 
-
 
      -     
 
-
 
      -     
 
282,302
 
      (576,802)  
                 
Total segment assets
   
$
1,863,187
 
    $ 1,789,809     
$
927,327
 
    $ 299,962     
$
1,196,773
 
    $ 678,473     
$
4,269,589
 
    $ 2,191,442  
1
The total amount of goodwill in the Canada operating segment is $40.4 million and, in the USA
,
operating segment is $184.6 million.