2003 Annual Report - Enerflex

The crude oil and natural gas service sector inCanada, where Enerflex’s operations are currentlyconcentrated, generally recorded sequentiallystronger results in each quarter of 2003.management’sdiscussion and analysisEnerflex Systems Ltd. is a leading supplier of products and services to the global oil and gas production industry.Our core expertise lies between the wellhead and the pipeline. Enerflex provides natural gas compression, powergeneration, and process equipment for either sale or lease, hydrocarbon production and processing facilities,electrical, instrumentation and control services, and a comprehensive package of field maintenance and contractingcapabilities. Through our ability to provide these products and services in an integrated manner, or as stand-aloneofferings, Enerflex offers its customers a unique value proposition.Headquartered in Calgary, Canada, the Company has approximately 1,900 employees and operations in Canada,the United States, the United Kingdom, the Netherlands, Germany, Australia, and Indonesia. The Company’scommon shares trade on the Toronto Stock Exchange under the symbol “EFX”.results of operationsThe following discussion and analysis highlights key business results and statistics for 2003 and 2002 and shouldbe read in conjunction with the audited consolidated financial statements and accompanying notes on pages 53to 68 of this Annual Report. Additional information relating to the Company, including the Company’s AnnualInformation Form, is available on SEDAR at www.sedar.com.Management’s Discussion and Analysis (MD&A) is reviewed and approved by the Company’s Audit Committee atthe end of each quarter. At year-end, the Board of Directors also reviews and approves the MD&A and the auditedconsolidated financial statements.The MD&A contains forward looking statements which are subject to risks,uncertainties and assumptions that are more fully described throughout this MD&A. Actual results may varysignificantly from those expected.The crude oil and natural gas service sector in Canada, where Enerflex’s operations are currently concentrated,generally recorded sequentially stronger results in each quarter of 2003 as a result of increased spending by oil andgas producers in a period of high commodity prices. Results in 2002 were weaker as customer spending wasdepressed, particularly in comparison to a very strong 2001.Enerflex 2003 Annual Report36