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IMPROVED CAPABILITIES.

NEW OPPORTUNITIES.

QUARTERLY REPORT FOR

THREE MONTHS ENDED JUNE 30, 2015

Suite 904, 1331 Macleod Trail SE, Calgary, AB, T2G 0K3 Canada

Tel: +1.403.387.6377 Toll-Free: +1.800.242.3178

www.enerflex.com

MANAGEMENT’S DISCUSSION AND ANALYSIS

AUGUST 6, 2015

The Management’s Discussion and Analysis (“MD&A”) for Enerflex Ltd. (“Enerflex” or “the Company”) should be read in conjunction

with the unaudited interim condensed financial statements for the three and six months ended June 30, 2015, the Company’s 2014

Annual Report, the Annual Information Form for the year ended December 31, 2014, the Business Acquisition Report, relating to the

business acquired from Axip Energy Services, LP (“Axip” or “the Axip Business”) dated September 5, 2014, and the cautionary

statement regarding forward-looking information and statements on page 13 of this report.

The MD&A focuses on information and key statistics from the unaudited interim condensed financial statements, and pertains to

known risks and uncertainties relating to the oil and gas service sector. This discussion should not be considered all-inclusive, as it

excludes possible future changes that may occur in general economic, political and environmental conditions.

FINANCIAL SUMMARY

Three months ended

Six months ended

June 30,

June 30,

($ Canadian thousands)

2015

2014

2015

2014

Total revenue

$ 389,721

$ 424,898

$ 845,242

$ 744,464

Gross margin

81,496

85,507

165,028

138,482

Selling and administrative expenses

44,516

56,532

94,422

99,982

Operating income

36,980

28,975

70,606

38,500

Earnings before finance costs and taxes (“EBIT”)

38,198

31,163

75,183

43,318

Net earnings

$ 26,682

$ 11,148

$ 49,540

$ 15,195

Key Financial Performance Indicators

1

Bookings

$ 86,538

$ 414,282

$ 227,138

$ 652,151

Backlog

$ 532,716

$ 867,861

$ 532,716

$ 867,861

Recurring revenue as a percentage of revenue

2

30.8%

27.7%

30.8%

27.7%

Gross margin as a percentage of revenue

20.9%

20.1%

19.5%

18.6%

EBIT as a percentage of revenue

2

9.5%

5.5%

9.5%

5.5%

Earnings before interest, tax, depreciation and amortization (“EBITDA”)

$ 54,234

$ 40,494

$ 109,173

$ 62,491

Return on capital employed

12.3%

8.5%

12.3%

8.5%

Net debt to EBITDA ratio

1.90:1

1.76:1

1.89:1

2.29:1

Cash from operations

$ 23,544

$ 53,067

$ 45,342

$ 99,663

1

Key financial performance indicators used by Enerflex to measure its performance include revenue and EBIT. Certain of these key performance indicators are non-GAAP measures and certain

are additional GAAP measures. Further detail is provided in the

Non-GAAP Measures

sections.

2

Determined by taking the trailing 12-month period.