EX-99.2

Interim Condensed Consolidated Financial Statements

Interim Condensed Consolidated Statements of Financial Position (unaudited)


($ United States millions)	Notes	March 31, 2026			December 31, 2025
Assets
Current assets
Cash and cash equivalents		$	47		$	81
Accounts receivable	2a		384			345
Unbilled revenue	2b		145			164
Energy infrastructure (“EI”) assets - finance leases receivable	3a		58			58
Inventories			279			280
Income taxes receivable			4			11
Derivative financial instruments			1			1
Prepayments			58			52
Assets held for sale	4		77			-
Total current assets			1,053			992
Unbilled revenue	2b		1			1
Property, plant and equipment ("PP&E")			100			102
EI assets - finance leases receivable	3a		171			180
EI assets - operating leases	3b		672			686
Lease right-of-use assets			57			61
Deferred tax assets			21			21
Intangible assets			28			29
Goodwill			412			430
Other assets			197			192
Total assets		$	2,712		$	2,694

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	5	$	363		$	396
Provisions			25			25
Income taxes payable			91			80
Deferred revenue			353			355
Lease liabilities			21			22
Derivative financial instruments			2			1
Liabilities held for sale	4		19			-
Total current liabilities			874			879
Deferred revenue			13			13
Long-term debt	6		552			582
Lease liabilities			48			50
Deferred tax liabilities			50			51
Other liabilities			35			26
Total liabilities		$	1,572		$	1,601

Shareholders’ equity
Share capital		$	501		$	498
Contributed surplus			663			664
Retained earnings			169			130
Accumulated other comprehensive loss			(193	)		(199	)
Total shareholders’ equity			1,140			1,093
Total liabilities and shareholders’ equity		$	2,712		$	2,694

See accompanying notes to the consolidated financial statements, including Note 13 “Guarantees, Commitments, and Contingencies”

Interim Condensed Consolidated Statements of Earnings and Comprehensive Income (unaudited)


		Three months ended March 31,
($ United States millions, except per share amounts)	Notes	2026			2025
Revenue	7,9	$	584		$	552
Cost of goods sold ("COGS")	9		439			424
Gross margin			145			128
Selling, general and administrative expenses ("SG&A")	8,9		79			57
Foreign exchange (gain) loss			(2	)		-
Operating income			68			71
Equity earnings from associates and joint ventures			1			-
(Loss) on financial instruments			(1	)		(2	)
Unrealized gain (loss) on redemption options			5			(3	)
Earnings before net finance costs and income taxes (“EBIT”)			73			66
Net finance costs	10		10			23
Earnings before income taxes (“EBT”)			63			43
Current income taxes			22			22
Deferred income taxes			(2	)		(3	)
Income taxes			20			19
Net earnings		$	43		$	24

Other comprehensive income

Items that may be reclassified to profit or loss in subsequent periods:
Unrealized (loss) on translation of foreign- denominated debt			(1	)		-
Unrealized gain on translation of financial statements of foreign operations			7			5
Other comprehensive income			6			5
Total comprehensive income		$	49		$	29

Earnings per share – basic		$	0.35		$	0.19
Earnings per share – diluted		$	0.35		$	0.19

Weighted average number of shares outstanding – basic			121,874,052			124,145,322
Weighted average number of shares outstanding – diluted			122,086,573			124,480,239

See accompanying notes to the unaudited interim condensed consolidated financial statements.

Interim Condensed Consolidated Statements of Cash Flows (unaudited)


		Three months ended March 31,
($ United States millions)	Notes	2026			2025
Operating Activities
Net earnings		$	43		$	24
Adjustments for:
Depreciation and amortization			37			39
Equity earnings from associates and joint ventures			(1	)		-
Deferred income taxes			(2	)		(3	)
Share-based compensation expense (recovery)	8		22			(3	)
Loss on financial instruments			1			2
Unrealized (gain) loss on redemption options			(5	)		3
			95			62
Net change in working capital and other	12		(63	)		34
Cash provided by operating activities		$	32		$	96

Investing Activities
Additions to:
PP&E		$	(3	)	$	(2	)
EI assets - operating leases	3b		(13	)		(12	)
Proceeds on disposal of:
EI assets - operating leases			5			9
Net (purchases) of financial instruments			(1	)		(7	)
Net change in working capital associated with investing activities			(7	)		(14	)
Cash used in investing activities		$	(19	)	$	(26	)

Financing Activities
Net repayment of the revolving credit facility ("RCF")	6	$	(29	)	$	(74	)
Lease liability principal repayment			(6	)		(6	)
Dividends			(4	)		(6	)
Stock option exercises			2			-
Cash used in financing activities		$	(37	)	$	(86	)
Effect of exchange rate changes on cash and cash equivalents denominated in foreign currencies		$	1		$	(1	)
Decrease in cash and cash equivalents			(23	)		(17	)
Cash and cash equivalents reclassified to assets held for sale	4		(11	)	-
Cash and cash equivalents, beginning of period			81			92
Cash and cash equivalents, end of period		$	47		$	75

See accompanying notes to the unaudited interim condensed consolidated financial statements.

Interim Condensed Consolidated Statements of Changes in Equity (unaudited)


									Accumulated other comprehensive losses
($ United States millions)	Share capital		Contributed surplus			Retained earnings			Foreign currency translation adjustments			Hedging reserve			Total
At January 1, 2026	$	498	$	664		$	130		$	(198	)	$	(1	)	$	1,093
Net earnings		-		-			43			-			-			43
Other comprehensive income		-		-			-			6			-			6
Effect of stock option plans		3		(1	)		-			-			-			2
Dividends		-		-			(4	)		-			-			(4	)
At March 31, 2026	$	501	$	663		$	169		$	(192	)	$	(1	)	$	1,140
At January 1, 2025	$	505	$	678		$	80		$	(214	)	$	-		$	1,049
Net earnings		-		-			24			-			-			24
Other comprehensive income		-		-			-			5			-			5
Dividends		-		-			(3	)		-			-			(3	)
At March 31, 2025	$	505	$	678		$	101		$	(209	)	$	-		$	1,075

See accompanying notes to the unaudited interim condensed consolidated financial statements.

Notes to the Interim Condensed Consolidated

Financial Statements (unaudited)

(All amounts in millions of United States dollars, except per share amounts or as otherwise noted.)

Note 1. Summary of Material Accounting Policies

(a)

Statement of Compliance

These unaudited interim condensed consolidated financial statements (“Financial Statements”) have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, and were approved and authorized for issue by the Board of Directors (the “Board”) on May 6, 2026.

(b)

Basis of Presentation and Measurement

The Financial Statements for the three months ended March 31, 2026 and 2025 were prepared in accordance with IAS 34 “Interim Financial Reporting” and do not include all the disclosures included in the annual consolidated financial statements for the year ended December 31, 2025. Accordingly, these Financial Statements should be read in conjunction with the annual consolidated financial statements. Certain comparative figures have been reclassified to conform to the current period’s presentation.

Preparation of these Financial Statements requires Management to make judgments, estimates, and assumptions based on existing knowledge that affect the application of accounting policies and reported amounts and disclosures. Actual results could differ from these estimates and assumptions. In particular, the impact of geopolitical events, such as imposed tariffs in the North American market and ongoing conflict in the Middle East, could materially impact customer and supplier arrangements, as well as interest and inflation rates, resulting in increased volatility and near-term uncertainty. Management has, to the extent reasonable, incorporated known facts and circumstances into estimates made, however actual results could differ from those estimates, and those differences could be material. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The Financial Statements are presented in United States dollars ("USD"), Enerflex Ltd. ("Enerflex" or the "Company") presentation currency, rounded to the nearest million except per share amounts or as otherwise noted. Transactions of the Company’s individual entities are recorded in their own functional currency based on the primary economic environment in which it operates. The Financial Statements are prepared on a going concern basis under the historical cost basis, with certain financial assets and financial liabilities recorded at fair value. There have been no significant changes in accounting policies compared to those described in the annual consolidated financial statements for the year-ended December 31, 2025, except for the change as per note 1(c) below.

(c)

Change in Accounting Policies

Amendments to Existing Standards

The following amendment, effective for annual periods beginning on or after January 1, 2026, was adopted by the Company as of January 1, 2026. There were no adjustments or additional disclosures that resulted from the adoption of this amendment.

IFRS 9 Financial Instruments (“IFRS 9”) and IFRS 7 Financial Instruments: Disclosures (“IFRS 7”)

In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to clarify that financial assets and financial liabilities are recognized and derecognized at settlement date except for regular way purchases or sales of financial assets and financial liabilities meeting conditions for new exception. The new exception permits companies to elect to derecognize certain financial liabilities settled via electronic payment systems earlier than the settlement date.

They also provide guidelines to assess contractual cash flow characteristics of financial assets, which apply to all contingent cash flows, including those arising from environmental, social, and governance (ESG)-linked features. Additionally, these amendments introduce new disclosure requirements for financial instruments with contingent cash‑flow features and equity instruments designated at fair value through other comprehensive income.

Note 2. Accounts Receivable and Unbilled Revenue

(a) Accounts Receivable

Accounts receivable consisted of the following:


	March 31, 2026			December 31, 2025


Trade receivables	$	377		$	338

Less: allowance for doubtful accounts		(8	)		(9	)


Trade receivables, net	$	369		$	329

Other receivables		15			16


Accounts receivable	$	384		$	345

Aging of trade receivables:


	March 31, 2026		December 31, 2025


Current to 90 days	$	311	$	280

Over 90 days		66		58


Trade receivables	$	377	$	338

(b) Unbilled Revenue

Movement in Unbilled Revenue was as follows:


	Three months ended			Twelve months ended
	March 31, 2026			December 31, 2025
Opening balance	$	165		$	159
Unbilled revenue recognized		176			818
Amounts billed		(194	)		(813	)
Assets held for sale		(1	)		-
Currency translation effects		-			1
Closing balance	$	146		$	165

Current unbilled revenue	$	145		$	164
Non-current unbilled revenue		1			1
Total unbilled revenue	$	146		$	165

Note 3. Energy Infrastructure Assets

The Company’s EI assets are comprised of Build-Own-Operate-Maintain (“BOOM”) assets and contract compression assets which are leased to client partners. At the inception of a lease contract, all leases are classified as either an operating lease or a finance lease in accordance with IFRS.

(a) EI Assets - Finance Leases Receivable

Lease arrangements for certain EI assets are considered finance leases when the risks and rewards of ownership are transferred to the lessee, which generally occurs in the following circumstances; ownership of the lease is transferred to the lessee by the end of the lease term; the lessee has the option to purchase the leased asset at a price that is sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception date, that option will be exercised; the term of the lease is for the major part of the economic life of the asset; or the present value of the lease payments amounts to substantially all of the fair value of the asset.

The majority of Enerflex's finance leases, which are primarily attributable to the EH reporting segment, have an initial term ranging from five to 10 years.

A summary of the gross and present value of future lease payments to be received under the Company's finance leases is shown below:


	Minimum lease payments and unguaranteed residual value						Present value of minimum lease payments and unguaranteed residual value
	March 31, 2026			December 31, 2025			March 31, 2026		December 31, 2025
Less than one year	$	61		$	60		$	58	$	58
Between one and five years		192			201			156		164
Greater than five years		25			29			15		16
	$	278		$	290		$	229	$	238
Less: Unearned interest revenue		(54	)		(57	)		-		-
Add: Unguaranteed residual value		5			5			-		-
Closing balance	$	229		$	238		$	229	$	238


	Three months ended			Twelve months ended
	March 31, 2026			December 31, 2025
Opening balance	$	238		$	238
Additions		-			38
Interest revenue		5			19
Payments (principal and interest)		(15	)		(57	)
Other		1			-
Closing balance	$	229		$	238

The average interest rates implicit in the leases are fixed at the contract date for the entire lease term. At March 31, 2026, the average interest rate was 7.6% per annum (December 31, 2025 – 7.6%). The finance leases receivable at the end of the reporting period were neither past due nor impaired.

(b) EI Assets – Operating Leases

EI assets under lease arrangements that are classified and accounted for as operating leases are stated at cost less accumulated depreciation and impairment losses. The estimated useful lives of these assets are generally between five and 30 years.

Changes in the carrying amount of EI assets - operating leases was as follows:


	Three months ended
	EI assets			Assets under construction			Total EI assets
Cost
January 1, 2026	$	1,105		$	27		$	1,132
Additions		-			13			13
Reclassification		14			(14	)		-
Disposals		(3	)		-			(3	)
Assets held for sale		(1	)		-			(1	)
Currency translation effects		5			-			5
March 31, 2026	$	1,120		$	26		$	1,146
Accumulated depreciation
January 1, 2026	$	(446	)	$	-		$	(446	)
Depreciation charge		(26	)		-			(26	)
Disposals		1			-			1
Assets held for sale		1			-			1
Currency translation effects		(4	)		-			(4	)
March 31, 2026	$	(474	)	$	-		$	(474	)
Net book value – March 31, 2026	$	646		$	26		$	672


	Twelve months ended
	EI assets			Assets under construction			Total EI assets
Cost
January 1, 2025	$	1,026		$	33		$	1,059
Additions		-			96			96
Reclassification		100			(102	)		(2	)
Disposals		(31	)		-			(31	)
Currency translation effects		10			-			10
December 31, 2025	$	1,105		$	27		$	1,132
Accumulated depreciation
January 1, 2025	$	(346	)	$	-		$	(346	)
Depreciation charge		(108	)		-			(108	)
Impairment		(3	)		-			(3	)
Disposals		20			-			20
Currency translation effects		(9	)		-			(9	)
December 31, 2025	$	(446	)	$	-		$	(446	)
Net book value – December 31, 2025	$	659		$	27		$	686

Depreciation of EI assets - operating leases included in COGS for the three months ended March 31, 2026 was $26 million (March 31, 2025 – $26 million).

During the three months ended March 31, 2026, the Company recognized $48 million of revenue related to operating leases in its Latin America (“LATAM”) and Eastern Hemisphere (“EH”) segments (March 31, 2025 – $50 million), and $40 million of revenue related to its North America (“NAM”) contract compression fleet (March 31, 2025 – $37 million).

Summary of the carrying amount of EI assets - operating leases by reporting segment was as follows:


	March 31, 2026		December 31, 2025
NAM	$	311	$	310
LATAM		160		166
EH		201		210
EI assets - operating leases	$	672	$	686

Note 4. Assets and Liabilities Held for sale

During the year, Enerflex entered into a definitive agreement to divest the majority of its operations in the Asia Pacific ("APAC") region to INNIO Group (“INNIO”). This business which is reported within the Eastern Hemisphere (EH) segment, operates principally in Australia, Indonesia and Thailand and is primarily focused on the AMS product line. The APAC region does not represent a significant component of the EH segment and is therefore not presented as a discontinued operation.

Completion of the transaction is subject to standard closing conditions and regulatory approvals and is expected to close during the second half of 2026.

The assets and liabilities of the operations held for sale as at March 31, 2026 were as follows:


	Three months ended
	March 31, 2026
Cash and Cash equivalents	$	11
Accounts receivable		16
Unbilled revenue		1
Inventories		21
Income taxes receivable		1
Prepayments		1
Property, plant and equipment		1
Lease right-of-use assets		3
Deferred tax assets		2
Goodwill		20
Assets held for sale	$	77

Accounts payable and accrued liabilities	$	13
Provisions		1
Income taxes payable		1
Deferred revenue		2
Lease liabilities		2
Liabilities held for sale	$	19

Note 5. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:


	March 31, 2026		December 31, 2025

Trade payables and accrued liabilities	$	346	$	384
Cash-settled share-based payments		17		12
Total accounts payable and accrued liabilities	$	363	$	396

Note 6. Long-Term Debt

Long-term debt comprised of USD denominated senior unsecured notes (the "2031 Notes") and the three-year secured RCF with both USD and Canadian dollar ("CAD") components.

Composition of the borrowings was as follows:


	Maturity Date	March 31, 2026			December 31, 2025
2031 Notes	January 15, 2031	$	400		$	400
Drawings on the RCF	July 11, 2028		162			193
			562			593
Deferred transaction costs			(10	)		(11	)
Long-term debt		$	552		$	582

Non-current portion of long-term debt		$	552		$	582
Long-term debt		$	552		$	582

The 2031 Notes bear interest at 6.875% per annum payable semi-annually in arrears.

The Company's limit under the RCF is $800 million, which may be increased by $50 million at the request of the Company, subject to the lenders’ consent. The maturity date of the RCF may be extended annually on or before the anniversary date with the consent of the lenders.

As part of the RCF, the Company may request issuance of up to $150 million in letters of guarantee, standby letters of credit, performance bonds, counter guarantees, import documentary credits, counter standby letters of credit, or similar credits to finance the day-to-day operations of the Company. As at March 31, 2026, the Company utilized $75 million of this $150 million limit. The Company has an additional $70 million unsecured credit facility (“LC Facility”) with one of the lenders in its RCF. This LC Facility allows the Company request the same forms of credits as under the RCF. This LC Facility is supported by performance security guarantees provided by Export Development Canada. As at March 31, 2026, the Company had utilized $26 million of the $70 million available limit.

The weighted average interest rate on the RCF for the three months ended March 31, 2026 was 5.0% (December 31, 2025 – 5.6%).

At March 31, 2026, without considering renewal at similar terms, the USD equivalent principal payments due over the next five years are $562 million.

The Company is required to maintain certain covenants on the RCF and the 2031 Notes. As at March 31, 2026, the Company was in compliance with its covenants, as shown below:


		Three months ended March 31
	2026				2025
	Requirement	Performance			Performance
Senior secured net funded debt to EBITDA ratio1 – Maximum	2.5x		0.2	x	0.1x
Bank-adjusted net debt to EBITDA ratio2 – Maximum	4.0x		0.9	x	1.3x
Interest coverage ratio3 – Minimum	2.5x		5.1	x	5.1x

1 Senior secured net funded debt to EBITDA is defined as borrowings under the RCF less cash and cash equivalents divided by trailing 12-months EBITDA, as defined by the Company’s lenders.

2 Bank-adjusted net debt to EBITDA is defined as borrowings under the RCF and 2031 Notes less cash and cash equivalents divided by the trailing 12-months EBITDA, as defined by the Company’s lenders.

\3 Interest coverage ratio is calculated by dividing the trailing 12-months EBITDA by interest expense over the same timeframe, as defined by the Company’s lenders.

Redemption Options

The 2031 Notes contain optional redemption features that allow the Company to redeem all or part of the Notes at prices set forth in the agreement, following certain dates specified. These redemption features constitute an embedded derivative asset that is required to be separated from the 2031 Notes and measured at fair value.

The embedded derivative components of the 2031 Notes are measured at fair value at each reporting date with gains or losses in fair value recognized through profit or loss. Management has assessed the fair value of the redemption options at March 31, 2026 and recognized an embedded derivative asset of $5 million in Other assets on the interim consolidated statement of financial position (December 31, 2025 – nil).

Note 7. Revenue

Revenue by product line was as follows:


	Three months ended March 31,
	2026		2025
Energy Infrastructure ("EI")	$	149	$	153
After-Market Services ("AMS")		107		120
Engineered Systems ("ES")		328		279
Total revenue	$	584	$	552

Revenue by geographic location, which is based on destination of sale, was as follows:


	Three months ended March 31,
	2026		2025
United States	$	318	$	246
Canada		56		76
Argentina		39		57
Nigeria		38		28
Oman		36		32
Brazil		19		14
Australia		18		18
Mexico		15		16
Bahrain		13		15
Thailand		7		6
Others		25		44
Total revenue	$	584	$	552

For the three months ended March 31, 2026, the Company had no individual customer which accounted for more than 10% of its revenue (March 31, 2025 – nil).

The following table outlines the Company’s unsatisfied performance obligations, by product line, as at March 31, 2026:


	Less than one year		One to two years		Greater than two years		Total
EI	$	417	$	306	$	560	$	1,283
AMS		105		30		58		193
ES		1,196		69		-		1,265
Total	$	1,718	$	405	$	618	$	2,741

Note 8. Selling, General & Administrative Expenses

SG&A expenses comprised of costs incurred by the Company to support the business operations that are not directly attributable to the production of goods or services.


	Three months ended March 31,
	2026			2025
Core SG&A1	$	55		$	54
Share-based compensation		22			(3	)
Depreciation and amortization		3			6
Bad debt recovery		(1	)		-
Total SG&A	$	79		$	57

1 Core SG&A is primarily comprised of compensation, third-party services, and information technology expenses.

Note 9. Segmented Information

The Company has identified three reporting segments for external reporting:

•

NAM consists of operations in Canada and the USA.

•

LATAM consists of operations in core countries of Argentina, Brazil, and Mexico, and also includes operations within the Andean regions of Bolivia, Colombia, and Peru.

•

EH consists of operations in the Middle East, Africa, Europe, and APAC.

Each segment generates revenue from the EI, AMS, and ES product lines.

The accounting policies, determination of reportable operating segments, and allocation of corporate overheads are consistent with those disclosed in Note 3 "Summary of Material Accounting Policies" and Note 24 "Segmented Information" of the Company's annual consolidated financial statements for the year-ended December 31, 2025.

The following table provides operating results for the Company’s reportable segments:


	NAM						LATAM					EH						Total
Three months ended March 31,	2026			2025			2026			2025		2026			2025			2026			2025
Segment revenue	$	419		$	368		$	78		$	102	$	89		$	89		$	586		$	559
Intersegment revenue		(1	)		(6	)		-			-		(1	)		(1	)		(2	)		(7	)
Revenue		418			362			78			102		88			88			584			552
EI		40			36			63			74		46			43			149			153
AMS		55			60			13			20		39			40			107			120
ES		323			266			2			8		3			5			328			279
Revenue		418			362			78			102		88			88			584			552
EI		21			18			39			51		24			27			84			96
AMS		47			52			9			14		31			30			87			96
ES		264			222			2			6		2			4			268			232
COGS1		332			292			50			71		57			61			439			424
EI		19			18			24			23		22			16			65			57
AMS		8			8			4			6		8			10			20			24
ES		59			44			-			2		1			1			60			47
Gross Margin		86			70			28			31		31			27			145			128
SG&A1		49			32			11			10		19			15			79			57
Foreign exchange (gain) loss		(1	)		-			(1	)		-		-			-			(2	)		-
Operating income	$	38		$	38		$	18		$	21	$	12		$	12		$	68		$	71

1 Depreciation and amortization for the reporting segments are recorded in COGS and SG&A. During the three months ended March 31, 2026, the amount of depreciation and amortization in NAM was $15 million (March 31, 2025 – $16 million); LATAM was $10 million (March 31, 2025 – $11 million); and EH was $12 million (March 31, 2025 – $12 million).

Note 10. Finance Costs and Income

Net finance costs comprised of the following:


	Three months ended March 31,
	2026		2025
Interest on debt	$	9	$	16
Accretion of Notes discount and deferred transaction costs		1		2
Lease interest expense		1		1
Other interest expense		-		5
Total finance costs	$	11	$	24

Finance Income
Interest income	$	1		1
Net finance costs	$	10	$	23

Note 11. Financial Instruments

The Company's financial instruments consist of cash and cash equivalents, accounts receivable, unbilled revenue, project asset, derivatives, redemption options, accounts payable and accrued liabilities, and long-term debt.

Designation and Fair Value of Financial Instruments

The Company's financial instruments at March 31, 2026 were designated and valued in the same manner as they were at December 31, 2025. Accordingly, with the exception of borrowings under the long-term debt, the estimated fair values of the Company's financial instruments approximated their carrying values at March 31, 2026.

The carrying value and estimated fair value of borrowings under the long-term debt as at March 31, 2026, was $552 million and $582 million, respectively (December 31, 2025 – $582 million and $607 million, respectively). The fair value of the 2031 Notes at March 31, 2026, was determined on a discounted cash flow basis with a weighted average discount rate of 6.2% (December 31, 2025 – 6.2%), while the fair value of the RCF approximates the amount outstanding under the RCF.

The Company’s embedded derivative asset related to its redemption options of its 2031 Notes was measured at fair value determined using a valuation model based on inputs from observable market data, including independent price publications and third-party pricing services; accordingly, the measurement is classified as level 2 within the fair value hierarchy. Changes in fair value are recorded as gains or losses on the consolidated statements of earnings.

Derivative Financial Instruments and Hedge Accounting

Foreign exchange contracts are transacted with financial institutions to hedge foreign currency denominated obligations and cash receipts related to purchases of inventory and sales of products.

The following table summarizes the Company’s commitments to buy and sell foreign currencies at March 31, 2026:


		Notional amount			Maturity
Canadian Dollar Denominated Contracts
Purchase contracts	USD	$	65		April 2026 - September 2027
Purchase contracts	EUR	$	13		April 2026 - December 2027
Sales contracts	USD	$	(93	)	April 2026 - April 2027

At March 31, 2026, the fair value of derivative financial instruments classified as financial assets was approximately $1 million and as financial liabilities was approximately $2 million (December 31, 2025 – $1 million and $1 million).

Foreign Currency Exposure

In the normal course of operations, the Company is exposed to movements in the CAD, USD, the Australian dollar, the Brazilian real, and the Argentine peso (“ARS”).

The types of foreign exchange risk and the Company’s related risk management strategies are as follows:

Transaction Exposure

The functional currency of Enerflex Ltd. on a stand-alone basis (the "Parent Company") and Canadian operations is CAD. The operations are primarily exposed to changes in the exchange rates on financial instruments denominated in USD.

The Parent Company has intercompany receivables and payables denominated in the USD. The Canadian operations of the Company sources the majority of its products and major components from the USA; consequently, reported inventory costs and the transaction prices charged to customers for equipment are impacted by the relative strength of the CAD. The Canadian operations also sells compression and processing packages in foreign currencies, primarily the USD. Most of Enerflex’s international orders are manufactured in the USA if the contract is denominated in USD, which minimizes the Company’s foreign currency exposure on these contracts. The Company identifies and hedges all significant transactional currency risks and has implemented a hedging policy applicable primarily to the Canadian operations, with the objective of securing the margins earned on awarded contracts denominated in currencies other than the CAD. In addition, the Company may hedge input costs that are paid in a currency other than the home currency of the subsidiary executing the contract. If the CAD weakens by five percent, the Company could experience foreign exchange loss recorded in the consolidated statements of earnings of less than $1 million on its USD denominated financial instruments.

Translation Exposure

The Company and its subsidiaries are exposed to translation risk of monetary items denominated in a currency different from their functional currency. The currencies with the most significant impact are the CAD, USD, and ARS.

The functional currency of the Parent Company is CAD while the functional currency of the majority of the Company's subsidiaries is USD. The Parent Company is therefore exposed to fluctuations of the CAD against the USD on its net investment in USD functional subsidiaries. The Company hedges this exposure via a net investment hedge by designating a portion of the Company's USD borrowings in the Parent Company as a hedging instrument. During the three months ended March 31, 2026, the Company recognized foreign exchange loss of $1 million on translation of the designated USD borrowings in the Parent Company in other comprehensive income. As at March 31, 2026, $56 million of USD borrowings in the Parent Company was designated as a hedging instrument. Management has determined that the Company's hedging relationships remain effective.

If the CAD were to weaken by five percent, the Company could experience additional foreign exchange losses on its USD borrowings in the Parent Company of approximately $3 million, which would be recorded in the consolidated statement of comprehensive income.

The functional currency of the Argentinian operation is the USD. The operation has cash and cash equivalents, and certain financial instruments denominated in its local currency ARS. With the expected devaluation of the ARS, caused by high inflation, the Company is at risk of foreign exchange losses on its financial instruments denominated in ARS. During the three months ended March 31, 2026, the Company had foreign exchange gains in Argentina of $1 million. The Company continues to utilize cash management strategies to mitigate foreign exchange losses, primarily by minimizing cash available to sustain operations. If the ARS weakens by five percent, the Company could experience foreign exchange losses of $1 million on its ARS denominated financial instruments.

Note 12. Supplemental Cash Flow Information

Changes in working capital and other during the period:


	Three months ended March 31,
	20261			2025
Accounts receivable	$	(55	)	$	20
Unbilled revenue		18			(6	)
EI assets - finance leases receivable		9			8
Inventories		(20	)		(11	)
Inventories - WIP related to EI assets - finance leases receivable		-			(19	)
Income taxes receivable		6			(1	)
Prepayments		(7	)		10
Accounts payable and accrued liabilities and provisions2		(22	)		13
Income taxes payable		12			(6	)
Deferred revenue		-			26
Foreign currency and other		(4	)		-
Net change in working capital and other	$	(63	)	$	34

1 Includes working capital changes associated with the APAC divestiture. Refer to Note 4 - "Assets and liabilities held for sale".

2 Change in accounts payable and accrued liabilities and provisions represent only the portion relating to operating activities.

Cash interest and taxes paid and received during the period:


	Three months ended March 31,
	2026		2025
Interest paid – long-term borrowings	$	3	$	4
Interest paid – lease liabilities		1		1
Total interest paid	$	4	$	5
Interest received		1		1

Income taxes paid		3		28


F-6 Notes to the Interim Condensed Consolidated Financial Statements


F-8 Notes to the Interim Condensed Consolidated Financial Statements


F-10 Notes to the Interim Condensed Consolidated Financial Statements


F-12 Notes to the Interim Condensed Consolidated Financial Statements


F-14 Notes to the Interim Condensed Consolidated Financial Statements


F-16 Notes to the Interim Condensed Consolidated Financial Statements


	F-1


	F-3


	F-5


	F-7