Enerflex Ltd.

Good day and thank you for standing by. Welcome to the InterFlex fourth quarter and year-end 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Jeff Federley, Vice President, Corporate Development and Capital Markets. Please go ahead.

Thank you, Liz, and good morning, everyone. With me today are Mark Rossiter, President and CEO, and Preet Densa, SVP and CFO. During today's call, our prepared remarks will focus on three key areas. One, the continued strong operational performance of the business and our outlook for 2025. Two, capital allocation, including capital spending and direct shareholder returns. And three, our progress in near and long-term strategic priorities. Before I turn it over to Mark, I'll remind everyone that today's discussion will include non-IFRS and other financial measures, as well as forward-looking statements regarding Enerflex's expectations for future performance and business prospects. Forward-looking information involved risks and uncertainties, and the stated expectations could differ materially from actual results or performance. For more information, refer to the advisory statements within our news release, MD&A, and other regulatory filings, all available on our website and under the CDAR Plus and EDGAR profiles. As part of our prepared remarks, we will be referring to slides in our updated investor presentation, which is available through a link on this webcast and on our website under the investor relations section. I'll turn it over to Mark Rossiter.

Thanks, Jeff, and thank you all for joining us on this morning's call. We delivered a strong finish to the year with solid operating results across Annerflex's geographies and product lines. Our energy infrastructure and aftermarket services business lines continue to provide steady, reliable performance and revenue streams, reinforcing Enerflex's ability to deliver sustainable returns across our global platform. Energy infrastructure and aftermarket services generated 69% of our gross margin before depreciation amortization in 2024, and we expect these business lines will continue to represent the core of Enerflex's profitability in 2025. Our strong operational performance and focus on maximizing free cash flow has resulted in a rapid deleveraging of our balance sheet. We reached the low end of our target leverage range, closing 2024 at 1.5 times, compared to 2.3 times at the end of Q4 2023. And we expect to make further progress in 2025. Our business remains strong, supported by roughly $1.5 billion in contract backlog, for our EI assets and a $1.3 billion backlog for our ES business line. Before reviewing our operational performance and business outlook, I would like to comment briefly on the geopolitical tensions across North America. We continue to closely monitor the situation, including the potential application of tariffs. Based on currently available information, the direct impact of tariffs on Enerflex's business is expected to be mitigated. by the company's diversified operations and proactive risk management. Enerflex's operations in the United States, Canada, and Mexico are largely distinct in the customers and projects they serve with negligible cross-border traffic for finished goods. The company has been working to mitigate the impact of potential tariffs, The United States is Enerflex's largest operating region, generating 45% of consolidated revenue in 2024 by destination of sale, and we believe the company is well positioned to benefit from growth in domestic energy production. Enerflex's operations in Canada and Mexico generated 10% and 3% of consolidated revenue in 2024, respectively. And now a few highlights for each of our business lines. The energy infrastructure business continues to perform well across our three core regions, the United States, Latin America, and the Middle East. In the United States, the fundamentals for contract compression remain strong, led by the expected increases in natural gas production, notably in the Permian Basin. We are pleased with the operational performance of our U.S. contract compression business, reflected utilization in the mid-90% range for both the quarter and full year 2024, and revenue per horsepower per month and profitability showing continued momentum. Slides 18 and 19 of our investor presentation highlight our fleet composition and the strong relative operating performance of the business. Demand for new contract compression equipment in the United States remains strong, and we expect our contract compression fleet will grow from 428,000 horsepower at the end of 2024 to over 475,000 horsepower this year. New units are being deployed under multi-year contracts in core operating regions with a focus on larger horsepower, natural gas, and electric drive applications. Slide 16 and 17 highlight our international energy infrastructure business, which includes approximately 1.2 million horsepower of operated compression and 26 build, own, operate, and maintain for what we call boom projects in the Middle East and Latin America. Our two produced water projects at Oman continue to perform very well, and we're in the process of expanding one of the sites, which we highlight on slide 20. Our international energy infrastructure business is supported by approximately $1.4 billion of contracted revenue and an average contract term that exceeds five years. Turning to aftermarket services, this business line benefited from strong activity levels and customer maintenance activities. We are especially pleased with the performance of our AMS business in countries where Enerflex also operates EI assets, reflective of a differentiated solution and our strong competitive position in core countries. On the engineered system side, we recorded bookings of $301 million inclusive of a $75 million derecognition with no associated gross margin of future revenue. related to the termination of the cryogenic natural gas processing facility project contract in Kurdistan. The majority of bookings during the quarter originated in the North American segment and relate to gas compression solutions. Total engineered systems backlog held steady at $1.3 billion, and we expect the majority of this backlog to be converted to revenue over the next 12 months. We are very happy with the continued strong project execution in our ES business, with margins during Q4 of 2024 also benefiting from a favorable product mix. However, during 2025, ES gross margin before depreciation amortization is expected to be more consistent with historical long-term average for the business line, reflective of the weakness in domestic natural gas prices during much of 2024 and a shift of project mix in Interflex ENERFLEX's ES backlog. Notwithstanding near-term revenue for this business plan is expected to remain steady, ENERFLEX is encouraged by initial customer response to improve domestic natural gas prices, and the medium-term outlook for ES products and services continues to be attractive, driven by expected increases in natural gas and produced water volumes across ENERFLEX's global footprint. Before I turn the call over to Preet, I want to review ENERFLEX's priorities for 2025. These include number one, enhancing the profitability of core operations. Number two, leveraging the company's leading position in core operations to capitalize on expected increases in natural gas and produced water volumes. And three, maximizing free cash flow to strengthen our financial position, provide optionality for direct shareholder returns, and invest in selective customer supported growth opportunities. With that, I'll turn it over to Preet to speak to the financial side of the business.