What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-18 compared with 2024-02-22 · 322 added, 240 removed, 1060 unchanged (35% of the section changed)

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Tennant Company and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, cash flows, and equity, for each of the three years in period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Tennant Company and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows, and equity, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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Critical Audit Matter Description

The Company performed a qualitative goodwill test on all reporting units.

The tests indicated that there was no goodwill impairment as of the annual assessment date.

The Company analyzed qualitative factors to determine whether it was more likely than not that the fair value of the reporting units was less than their carrying amounts as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test.

Given the amount of goodwill within the EMEA reporting unit, the judgment used in the EMEA reporting unit’s qualitative assessment, and the difference between the most recent fair value estimate and the carrying amount of the EMEA reporting unit, auditing management’s conclusions related to the EMEA qualitative goodwill impairment assessment involved subjective judgment and an increased extent of effort, including the need to involve our fair value specialists.

The Company’s annual evaluation of goodwill for impairment involved the comparison of the EMEA reporting unit’s fair value to its carrying value.

The Company determined the fair value using a combination of income and market approaches.

The income approach utilized a discounted cash flow model, which required management to make significant estimates and assumptions related to forecasts of future revenue, profit margins, long-term growth rate, and discount rate.

The market approach required management to make significant assumptions

related to earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples.

As of December 31, 2024, the goodwill balance for the EMEA reporting unit was $151.1 million.

The fair value of the EMEA reporting unit exceeded its carrying value, and therefore, no impairment was recognized.

Given the significant judgments made by management to estimate the fair value of the EMEA reporting unit and the differences between its fair value and carrying value, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions regarding forecasts of future revenue, profit margins, long-term growth rate, discount rate, and EBITDA multiples required a high degree of auditor judgment and an increased extent of effort, including the need to involve fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s qualitative assessment of goodwill impairment for the EMEA reporting unit included the following, among others:

• We tested the effectiveness of controls over goodwill, including those over management’s judgments related to macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events, and capital markets pricing.

• We evaluated the reasonableness of management’s qualitative assessment of factors affecting forecasted revenue and profit margins by comparing the forecasts to (1) historical results, (2) internal communications between management and the Board of Directors, and (3) information included in Company press releases.

• With the assistance of our fair value specialists, we evaluated the reasonableness of management’s qualitative assessment by performing the following:

(1) evaluated GDP growth, inflation and other macroeconomic variables, as well as industry growth rates, (2) estimated industry discount rates, (3) analyzed growth, margin, and valuation multiple trends of guideline public companies, (4) compared recent fair value estimate and carrying amount, and (5) analyzed the trend of market capitalization of the entity and public peer companies.

• Assessed for potential indicators of impairment such as macroeconomic and industry conditions, financial performance, and events affecting the reporting unit such as a change in the carrying amount of its net assets or asset impairments at components of the reporting unit.

• We evaluated the financial results of the EMEA reporting unit compared to forecasts from the October 1, 2023 annual measurement date to December 31, 2023.

Our audit procedures related to the forecasts of future revenue, profit margins, long-term growth rate, discount rate, and EBITDA multiples for the EMEA reporting unit included the following, among others:

• We tested the effectiveness of controls over goodwill, including those over the underlying assumptions to forecast future revenue, long-term growth rate, profit margins, the selection of the discount rate, and the selection of the EBITDA multiples.

• We evaluated management’s ability to accurately forecast future revenues and profit margins by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecasted revenue and profit margins by comparing the forecasts to (1) historical results, (2) internal communications between management and the Board of Directors, and (3) information included in Company press releases as well as in analyst and industry reports of the Company and companies in its peer group.

• With the assistance of our fair value specialists, we evaluated the valuation methodologies, the long-term growth rate and discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the long-term growth rate and discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the EBITDA multiples used in estimating fair value, including testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to its guideline companies.

/s/ Deloitte & Touche LLP

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 18, 2025, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at TCS EMEA GmbH ("TCS"), which was acquired on February 29, 2024, and whose financial statements constitute $37.2 million of total assets and $22.0 million of total revenues included within the consolidated financial statement amounts of Tennant Company as of and for the year ended December 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting at TCS.

Basis for Opinion

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Net foreign currency transaction gain (loss) 0.1 0.3 ( 1.2 )

Loss on extinguishment of debt — — ( 11.3 )

Other (expense) income, net ( 0.5 ) ( 1.6 ) 0.6

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Net income $ 83.7 $ 109.5 $ 66.3

Other comprehensive income (loss):

Foreign currency translation adjustments (net of related tax benefit (expense) of $ 0.8 , $( 1.2 ), and $ 0.4 , respectively)

Other comprehensive (loss) income:

Foreign currency translation adjustments (net of related tax (expense) benefit of $( 0.2 ), $ 0.8 , and $( 1.2 ), respectively)

( 29.6 ) 8.3 ( 17.9 )

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( 0.9 ) 1.0 4.8

Derivative financial instruments (net of tax (expense) benefit of $ 0.4 , $( 0.3 ), and $ 0.1 , respectively)

Derivative financial instruments (net of tax benefit (expense) of $ 0.0 , $ 0.4 , and $( 0.3 ), respectively)

( 0.1 ) ( 1.4 ) 0.8

Total other comprehensive income (loss), net of tax 7.9 ( 12.3 ) ( 17.8 )

Unrealized gain on debt securities (net of tax benefit of $ 0.1 , $ 0.0 , and $ 0.0 , respectively)

Total other comprehensive (loss) income, net of tax ( 30.4 ) 7.9 ( 12.3 )

Comprehensive income $ 53.3 $ 117.4 $ 54.0

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(In millions)

Years ended December 31 2023 2022 2021

December 31 2024 2023 2022

OPERATING ACTIVITIES

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Gain on sale of assets — — ( 3.7 )

Debt extinguishment cost — — 11.3

Other, net 0.6 1.3 1.0

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Purchases of property, plant and equipment ( 20.9 ) ( 22.8 ) ( 25.0 )

Purchase of investment ( 32.1 ) — —

Payments made in connection with business acquisition, net of cash acquired ( 25.7 ) — —

Investment in leased assets ( 0.5 ) ( 1.2 ) ( 4.3 )

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Other, net — — 0.1

Net cash (used in) provided by investing activities ( 23.2 ) ( 24.5 ) 1.7

Net cash used in investing activities ( 78.4 ) ( 23.2 ) ( 24.5 )

FINANCING ACTIVITIES

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Repayments of borrowings ( 42.5 ) ( 120.0 ) ( 19.1 )

Debt extinguishment payment — — ( 8.4 )

Contingent consideration payments — — ( 2.5 )

Payment of debt financing costs ( 2.2 ) — —

Change in finance lease obligations — 0.2 —

Proceeds (repurchases) from exercise of stock options, net of employee tax withholdings obligations 19.0 ( 0.9 ) 5.0

Proceeds from exercise of stock options, net of employee tax withholdings obligations of $ 3.8 , $ 1.7 and $ 2.0 , respectively

19.6 19.0 ( 0.9 )

Dividends paid ( 21.4 ) ( 20.1 ) ( 18.9 )

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Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 3.4 ) ( 2.9 ) ( 4.7 )

Net increase (decrease) in cash, cash equivalents and restricted cash 39.7 ( 46.2 ) ( 17.4 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 17.3 ) 39.7 ( 46.2 )

Cash, cash equivalents and restricted cash at beginning of year 117.1 77.4 123.6

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Net income — — — 109.5 — 109.5 — 109.5

Other comprehensive loss — — — — ( 12.3 ) ( 12.3 ) — ( 12.3 )

Other comprehensive income — — — — 7.9 7.9 — 7.9

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 23,622 shares

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Net income — — — 83.7 — 83.7 — 83.7

Other comprehensive income — — — — 7.9 7.9 — 7.9

Other comprehensive loss — — — — ( 30.4 ) ( 30.4 ) — ( 30.4 )

Issue stock for directors, employee benefit and stock plans, net of related tax withholdings of 34,511 shares

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The Company reaches these customers through the industry's largest direct sales and service organization and through a strong and well-supported network of authorized distributors worldwide.

Consolidation – The consolidated financial statements include the accounts of the Company and its subsidiaries.

All intercompany transactions and balances have been eliminated.

Consolidation – The consolidated financial statements include the accounts of the Company and all subsidiaries in which we have a controlling financial interest.

All intercompany transactions and accounts are eliminated in consolidation.

Translation of Non-U.S.

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Gains or losses resulting from translation are included as a separate component of accumulated other comprehensive loss.

The balance of cumulative foreign currency translation adjustments recorded within accumulated other comprehensive loss as of December 31, 2023, 2022 and 2021 was a net loss of $ 45.6 million, $ 53.9 million and $ 36.0 million, respectively.

The majority of translation adjustments are not adjusted for income taxes as substantially all translation adjustments relate to permanent investments in non-U.S.

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GAAP”) requires us to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Estimates are used in determining, among other items, sales promotions and incentives accruals, inventory valuation, warranty reserves, allowance for doubtful accounts, pension and postretirement accruals, useful lives for intangible assets, and future cash flows associated with impairment testing for goodwill and other long-lived assets.

Estimates are used in determining, among other items, sales promotions and incentives accruals, inventory valuation, warranty reserves, allowance for doubtful accounts, pension and postretirement accruals, useful lives for intangible assets, valuing investments, and future cash flows associated with impairment testing for goodwill and other long-lived assets.

Actual results could differ from our estimates.

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Cost is determined on a first-in, first-out (“FIFO”) basis except for inventories in North America, which are determined on a last-in, first-out (“LIFO”) basis.

Cloud Computing Arrangements – We capitalize implementation costs incurred in cloud computing (i.e., hosting arrangements) during the application development phase, and depreciate the costs over the non-cancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised or for which the exercise is controlled by the service provider.

We classify the amortization of capitalized implementation costs in the same line item in the consolidated statements of income as the fees associated with the hosting service (i.e., operating and selling and administrative expense) and classify the related payments in the consolidated statements of cash flows in the same manner as payments made for fees associated with the hosting service (i.e.

cash flows from operating activities).

In addition, the capitalization of implementation costs is reflected in the consolidated balance sheets consistent with the location of prepayment of fees for the hosting element (i.e., within prepaid and other current assets).

As of December 31, 2024 and 2023, there was $23.3 million and $0.2 million, respectively, recorded in prepaid and other current assets in the consolidated balance sheets.

Amortization expense for the years ended December 31, 2024 and 2023 was not material.

Property, Plant and Equipment – Property, plant and equipment is carried at cost.

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Goodwill – Goodwill represents the excess of cost over the fair value of net assets of businesses acquired and is allocated to our reporting units at the time of the acquisition.

We analyze goodwill on an annual basis as of October 1 and when an event occurs or circumstances change that may reduce the fair value of one of our reporting units below its carrying amount.

We analyze goodwill on an annual basis as

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

of October 1 and when an event occurs, or circumstances change that may reduce the fair value of one of our reporting units below its carrying amount.

We have the option of first analyzing qualitative factors to determine whether it is more likely than not that the fair value of any reporting unit is less than its carrying amount.

However, we may elect to perform a quantitative goodwill impairment test in lieu of the qualitative test.

In 2023, we performed a qualitative goodwill test on all reporting units.

Our tests indicated that there was no goodwill impairment in any of our reporting units as of our annual assessment date.

However, we may elect to perform a quantitative goodwill impairment test even if no indications of a potential impairment exist.

During 2024, we performed a qualitative goodwill assessment on all reporting units except for Europe, Middle East and Africa ("EMEA") and Asia-Pacific ("APAC") for which we performed a quantitative goodwill assessment.

Our assessments indicated that there was no goodwill impairment in any of our reporting units as of our annual assessment date.

During 2023, we performed a qualitative goodwill assessment on all reporting units.

Our assessment indicated that there was no goodwill impairment in any of our reporting units as of our annual assessment date.

Intangible Assets – Intangible assets consist of definite lived customer lists, trade names and technology.

Generally, intangible assets classified as trade names are amortized on a straight-line basis and intangible assets classified as customer lists or technology are amortized using an accelerated method of amortization.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Impairment of Long-Lived Assets and Assets Held for Sale – We periodically review our intangible and long-lived assets for impairment and assess whether events or circumstances indicate that the carrying amount of the assets may not be recoverable.

We generally deem an asset group to be impaired if an estimate of undiscounted future operating cash flows is less than its carrying amount.

We generally deem an asset group to be impaired if an estimate of undiscounted future operating cash flows are less than its carrying amount.

If impaired, an impairment loss is recognized based on the excess of the carrying amount of the individual asset group over its fair value.

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Upon retirement or disposition, the asset cost and related accumulated depreciation or amortization are removed from the accounts and a gain or loss is recognized based on the difference between the fair value of proceeds received and carrying value of the assets held for sale.

Purchase of Common Stock – We repurchase our common stock under 2016 repurchase program authorized by our Board of Directors.

This program allows us to repurchase up to an aggregate of 821,413 shares of our common stock.

Purchase of Common Stock – We repurchase our common stock under a 2016 repurchase program authorized by our Board of Directors.

This program allows us to repurchase up to an aggregate of 1,000,000 shares of our common stock, and 623,061 shares remain authorized under the program.

Upon repurchase, the par value is charged to common stock and the remaining purchase price is charged to additional paid-in capital.

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We account for our hedging instruments as either assets or liabilities on the consolidated balance sheets and measure them at fair value.

Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting.

Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

hedge accounting.

Gains and losses for all instruments that do not qualify for hedge accounting are recorded each period to net foreign currency transaction loss in our consolidated statements of income.

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If the underlying hedged transaction ceases to exist, all changes in fair value of the related derivatives that have not been settled are recorded in our consolidated statements of income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Revenue Recognition – Revenue is recognized when control transfers under the terms of the contract with our customers.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services.

Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.

Sales and other taxes we collect concurrently with revenue-producing activities are excluded from revenue.

We do not account for shipping and handling as a distinct performance obligation as we generally perform shipping and handling activities after we transfer control of goods to the customer.

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Performance share awards ("PSUs") are stock awards where the ultimate number of shares issued will be contingent on the Company’s performance against certain performance goals.

The Compensation Committee has the ability to adjust performance goals or modify the manner of measuring or evaluating a performance goal using its discretion.

The Compensation Committee can adjust performance goals or modify the manner of measuring or evaluating a performance goal using its discretion.

The fair value of each PSU is based on the market value on the date of grant.

We recognize expense related to the estimated vesting of our PSUs granted.

The estimated vesting of the PSUs is based on the probability of achieving certain performance metrics over the specified performance period.

To determine the amount of compensation cost to be recognized in each period, we estimate forfeitures.

Research and Development – Research and development costs are expensed as incurred.

The estimated vesting of the PSUs is based on the

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

probability of achieving certain performance metrics over the specified performance period.

To determine the amount of compensation cost to be recognized in each period, we estimate forfeitures.

Research and Development – Research and development costs are expensed as incurred.

Advertising Costs – We advertise products, technologies and solutions to customers and prospective customers through a variety of marketing campaign and promotional efforts.

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These are not included in our computation of diluted earnings per share if we have a net loss attributable to the Company in a reporting period or if the instrument's effects are anti-dilutive.

Investments, Available-for-Sale – As described in Note 12, debt securities classified as available-for-sale securities are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income (loss) and reported in shareholders' equity.

These investments are subject to periodic impairment review.

Investments, Measurement Alternative – The Company's investments as described in Note 12 which are valued under the measurement alternative include equity securities for which the Company does not have significant influence and fair value is not readily determinable.

Accounting Standard Update ("ASU") 2016-01 requires equity securities to be recorded at cost and adjusted to fair value at each reporting period.

However, the guidance allows for a measurement alternative, which is to record investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer.

Due to the lack of readily determinable fair values for such investments, for which the Company does not have significant influence, the Company accounts for these investments under the measurement alternative at cost, less impairment.

The Company performs qualitative impairment assessments on its investments recorded under the measurement alternative.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Newly Adopted Accounting Pronouncements

In January 2021, we adopted Accounting Standards Update ("ASU") No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The impact of this amended guidance on our consolidated financial statements and related disclosures was immaterial.

Defined Benefit Plans

In December 2022 , we adopted ASU No.

2018-14 , Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20):

Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans, which updates disclosure requirements for defined benefit pension and other postretirement plans.

Adoption of this ASU did not have a material impact on our consolidated financial statements.

Reference Rate Reform

In March 2020 , the Financial Accounting Standards Board ("FASB") issued ASU No.

2020-04 , Reference Rate Reform (Topic 848 ).

This ASU provides optional expedients to applying generally accepted accounting principles to certain contract modifications, hedging relationships, and other transactions affected by the reference rate reform, which affects the London Inter-bank Offered Rate ("LIBOR"), if certain criteria are met.

The amendments were effective March 12, 2020 through December 31, 2022.

There has been no material impact to our financial condition, results of operations, or cash flows from reference rate reform as of December 31, 2022.

See Note 9 for information on the replacement of LIBOR with the Secured Overnight Financing Rate ("SOFR") in our Credit Agreements (defined below) on November 17, 2022.

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products and services.

Segment Reporting

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends the existing segment reporting guidance (ASC Topic 280 — Segment Reporting (“ASC 280”)) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition, the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

We have adopted the new standard effective December 31, 2024.

While the adoption has no impact on our consolidated financial statements, it has resulted in incremental disclosures within the footnotes to our consolidated financial statements.

Refer to Note 20, Segment Reporting for the inclusion of the new required disclosures.

Revenue is recognized upon the transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products and services.

Generally, these criteria are met at the time the product is shipped.

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Parts and consumables 274.3 279.5 263.1

Specialty surface coatings (a)

Service and other 203.7 187.7 165.1

Total $ 1,286.7 $ 1,243.6 $ 1,092.2

(a) On February 1, 2021, we sold our Coatings business.

Further details regarding the sale are discussed in Note 5.

Net sales by sales channel

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We forecast the most likely amount of the incentive to be paid at the time of sale, update this forecast quarterly, and adjust the transaction price accordingly to reflect the new amount of incentives expected to be earned by the customer.

A majority of our customer incentives are settled within one year.

The majority of our customer incentives are settled within one year.

We record our accruals for volume-based rebates and other promotions in other current liabilities on our consolidated balance sheets.

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Deferred Revenue

We sell separately priced prepaid contracts to our customers where we receive payment at the inception of the contract and defer recognition of the consideration received because we have to satisfy future performance

We provide separately priced prepaid contracts to our customers, collecting payment at the start of the agreement.

Revenue recognition is deferred until we meet our future performance obligations.

Our deferred revenue balance includes autonomous subscription sales and prepaid maintenance contracts on our machines ranging from 12 months to 60 months.

In circumstances where prepaid contracts are sold simultaneously with machines, we use an observable price to determine stand-alone selling price for separate performance obligations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Our deferred revenue balance is primarily attributed to prepaid maintenance contracts on our machines ranging from 12 months to 60 months.

In circumstances where prepaid contracts are sold simultaneously with machines, we use an observable price to determine stand-alone selling price for separate performance obligations.

The change in the deferred revenue balance for the years ended December 31, 2024 and 2023 was as follows:

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Other costs - Selling and administrative expense (a)

Other costs - Cost of sales (a)

Total pre-tax restructuring costs $ 8.2 $ 2.9

(a) Includes facility exit costs associated with facility moves.

The charges in 2023 impacted the Europe, Middle East (EMEA) and Asia Pacific (APAC) operating segments.

The charges in 2022 impacted all operating segments.

Our restructuring actions represent the

Our restructuring actions represent the continued execution of a multi-year enterprise strategy to drive increased productivity throughout our operations.

The charges in 2024 impacted all operating segments and

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

continued execution of a multi-year enterprise strategy to drive increased productivity throughout our operations.

A reconciliation to the ending liability balance of severance and related costs as of December 31, 2023 is as follows:

were related to a global workforce realignment to support our key strategic initiatives.

The charges in 2023 impacted the Europe, Middle East and Africa ("EMEA") and Asia Pacific ("APAC") operating segments.

A reconciliation to the ending liability balance of severance and related costs as of December 31, 2024 and 2023 is as follows:

Beginning balance $ 2.4 $ 1.7

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Acquisitions and Divestitures

Acquisition of M&F Management and Financing GmbH

On February 29, 2024, we acquired 100 % of M&F Management and Financing GmbH ("M&F"), the parent company of TCS EMEA GmbH ("TCS"), as we seek to accelerate growth in the EMEA region.

Based in Austria, TCS was Tennant Company's largest Central and Eastern Europe distributor.

The acquisition gives Tennant a knowledgeable and experienced sales force and an established direct channel into countries including Romania, Hungary, Czech Republic, and Slovakia, along with an expanded network in Austria, Switzerland, Poland, and other nations in the region, as well as the Middle East and Africa.

Our consolidated financial results for the year ended December 31, 2024 include $ 22.0 million of revenue and $ 0.2 million of net income related to TCS.

The proforma impact of this acquisition is immaterial to our operations.

The purchase price has been allocated based on the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition.

The following table summarizes the fair value measurement of the assets acquired and liabilities assumed as of the date of acquisition:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

2024 Adjustments June 30,

2024 Adjustments December 31,

Components of purchase price:

Cash paid $ 30.8 $ 0.2 $ 31.0 $ — $ 31.0

Settlement of preexisting transactions 3.9 — 3.9 — 3.9

Total purchase price 34.7 0.2 34.9 — 34.9

Cash 5.3 0.1 5.4 — 5.4

Other current assets 8.0 ( 0.7 ) 7.3 1.6 8.9

Intangible assets subject to amortization

Customer lists 13.6 ( 0.4 ) 13.2 — 13.2

Backlog 0.6 — 0.6 — 0.6

Other assets 5.3 0.3 5.6 0.1 5.7

Total identifiable assets acquired 32.8 ( 0.7 ) 32.1 1.7 33.8

Current liabilities ( 1.5 ) — ( 1.5 ) ( 1.6 )

Long-term liabilities ( 5.0 ) ( 0.2 ) ( 5.2 ) ( 1.5 ) ( 6.7 )

Total identifiable liabilities assumed ( 6.5 ) ( 0.2 ) ( 6.7 ) ( 1.6 ) ( 8.3 )

Net assets acquired 26.3 ( 0.9 ) 25.4 0.1 25.5

Goodwill $ 8.4 $ 1.1 $ 9.5 $ ( 0.1 ) $ 9.4

The total purchase price includes cash paid of $ 31.0 million and the settlement of $ 3.9 million of preexisting transactions.

In connection with the acquisition, we paid cash totaling $ 30.8 million on the acquisition date of February 29, 2024 and $ 0.2 million in the second quarter of 2024.

The adjustments made to the purchase price allocation in the fourth quarter of 2024 relate to the finalization of the impacts associated with income taxes.

The goodwill is not expected to be deductible for income tax purposes.

The expected lives of the acquired intangible assets is 3 months and 10 years for backlog and customer lists, respectively, and are being amortized on a straight-line basis.

Sale of Building

During the second quarter of 2022, we sold a building located in Golden Valley, Minnesota.

The resulting pre-tax gain was $ 3.7 million and is reflected within gain on sale of assets in the consolidated statements of income.

Proceeds from sale of assets were $ 4.1 million.

Sale of Coatings Business

During the first quarter of 2021, we sold the Coatings business.

The resulting pre-tax gain was $ 9.8 million and is reflected within gain on sale of business in the consolidated statements of income.

Proceeds from sale of business, net of cash divested, were $ 24.7 million.

Acquisition of Gaomei

On January 4, 2019 , we completed the acquisition of Hefei Gaomei Cleaning Machines Co., Ltd.

and Anhui Rongen Environmental Protection Technology Co., Ltd.

(collectively "Gaomei"), privately held designers and manufacturers of commercial cleaning solutions based in China.

The financial results for Gaomei have been included in the consolidated financial results since the date of closing.

The total purchase price included $ 22.4 million of payments and related adjustments paid in 2019 and contingent consideration payments totaling $ 2.5 million paid in 2021.

The resulting pre-tax gain was $ 3.7 million and is reflected as a gain on sale of assets in the consolidated statements of income.

Proceeds from the sale of assets were $ 4.1 million.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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For purposes of performing our goodwill impairment analysis, we have identified our reporting units as North America, Latin America, EMEA and APAC.

In 2021, the Coatings reporting unit was sold and is no longer considered a reporting unit.

We have the option of first analyzing qualitative factors to determine whether it is more likely than not that the fair value of any reporting unit is less than its carrying amount.

We may elect to perform a quantitative goodwill impairment test in lieu of the qualitative test, and in 2023 we performed the qualitative goodwill test on all reporting units.

In 2022, we elected to perform the quantitative goodwill test on all reporting units.

Based on our analysis, we determined that there was no impairment of goodwill as of December 31, 2023 and 2022.

The changes in the carrying amount of goodwill are as follows:

The changes in the carrying amount of goodwill were as follows:

Goodwill Accumulated

Balance as of December 31, 2024 $ 218.1 $ ( 32.5 ) $ 185.6

Additions 9.4 — 9.4

Foreign currency fluctuations ( 12.0 ) 0.8 ( 11.2 )

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Balance as of December 31, 2022 $ 218.8 $ ( 36.8 ) $ 182.0

The balances of acquired intangible assets, excluding goodwill, are as follows:

There has been no impairment of goodwill for any of the years presented.

The additions recorded to goodwill during 2024 were related to the acquisition of TCS, as described further in Note 5.

The balances of acquired intangible assets, excluding goodwill, were as follows:

Technology Total

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Weighted-average original life (in years) 15 11 11

In 2021, we divested identified intangible assets, excluding goodwill, with a carrying value of $ 0.9 million and $ 1.4 million in the categories of customer lists and trade names, respectively, as a result of the sale of the Coatings business discussed in Note 5.

As part of our acquisition of TCS, we acquired customer lists and backlog with a combined fair value of $ 13.8 million.

Further details regarding the purchase price allocation of TCS are described further in Note 5.

Amortization expense of intangible assets was $ 15.0 million, $ 14.7 million and $ 15.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

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Thereafter 13.9

2021 Credit Agreement

On April 5, 2021, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the “2021 Credit Agreement”) with JPMorgan Chase Bank, N.A.

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dollars or certain other currencies.

The fee for committed funds under the revolving facility of the 2021 Credit Agreement ranges from an annual rate of 0.15 % to 0.30 %, depending on our leverage ratio.

On November 10, 2022, Tennant Company further amended the 2021 Credit Agreement (the "Amendment") to update the benchmark provisions to replace LIBOR with Term SOFR (as defined in the Amendment) as the reference rate for purposes of calculating interest under the 2021 Credit Agreement.

On November 10, 2022, we further amended the 2021 Credit Agreement (the "Amendment") to update the benchmark provisions to replace LIBOR with Term SOFR (as defined in the Amendment) as the reference rate for purposes of calculating interest under the 2021 Credit Agreement.

Pursuant to the Amendment, borrowings denominated in U.S.

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All other material terms included in the 2021 Credit Agreement remain unchanged as a result of the Amendment.

In connection with the 2021 Credit Agreement, we reaffirmed our security interest in favor of the lenders in substantially all our personal property and pledged the stock of our domestic subsidiaries and 65 % of the stock of our first-tier foreign subsidiaries.

The obligations under the 2021 Credit Agreement are also guaranteed by certain of our first-tier domestic subsidiaries, and those subsidiaries also provided a security interest in their similar personal property.

Our 2021 Credit Agreement restricts the payment of dividends or repurchasing of stock requiring that, after giving effect to such payments, no default exists or would result from such payment.

Additionally, cash dividends are restricted to $ 7.5 million per quarter, and approved levels of other restricted payments range from $ 60.0 million to unlimited based on our net leverage ratio (not taking into account any acquisition holiday) after giving effect to such payment.

On August 7, 2024, we and certain of our foreign subsidiaries entered into an Amended and Restated Credit Agreement (the "2024 Credit Agreement") with JPMorgan Chase Bank, N.A.

as administrative agent, which amends and restates the 2021 Credit Agreement as amended by the Amendment.

The 2024 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior secured credit facility until August 7, 2029, consisting of a revolving facility in an amount up to $ 650.0 million, with an option to expand the revolving facility or obtain incremental term loans by up to $ 325.0 million, with the consent of the lenders willing to provide additional borrowings in the form of increases to their revolving facility commitment or funding of incremental term loans.

Borrowings may be denominated in U.S.

dollars or certain other currencies.

The fee for undrawn committed funds under the revolving facility of the 2024 Credit Agreement ranges from an annual rate of 0.15 % to 0.30 %, depending on our leverage ratio.

Borrowings denominated in U.S.

dollars under the 2024 Credit Agreement bear interest at a rate per annum equal to (a) the greatest of (i) the prime rate, (ii) the NYFRB Rate (as defined in the 2024 Credit Agreement) plus 0.50 % and (iii) the Adjusted Term SOFR Rate (as defined in the 2024 Credit Agreement) for a one month period plus 1 %;

but in any case not less than 1 %, plus an additional spread of 0.25 % to 1 %, depending on our leverage ratio, (b) the Adjusted Term SOFR Rate plus an additional spread of 1.25 % to 2 %, depending on our leverage ratio, or (c) the Adjusted Daily

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Simple RFR (as defined in the 2024 Credit Agreement) plus an additional spread of 1.25 % to 2 %, depending on our leverage ratio.

In connection with the 2024 Credit Agreement, we reaffirmed our security interest in favor of the lenders in substantially all our personal property and pledged the stock of certain of our domestic and foreign subsidiaries.

The obligations under the 2024 Credit Agreement are also guaranteed by certain of our subsidiaries and those subsidiaries also provided a security interest in their similar personal property.

The 2024 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting our ability to incur indebtedness and liens and merge or consolidate with another entity.

Further, the 2024 Credit Agreement contains the following covenants:

• a covenant requiring us to maintain an indebtedness to EBITDA ratio, determined as of the end of each of our fiscal quarters, of no greater than 3.50 to 1.00, with certain alternative requirements for permitted acquisitions greater than $ 50.0 million;

• a covenant requiring us to maintain an indebtedness to EBITDA ratio, determined as of the end of each fiscal quarter, of no greater than 3.75 to 1.00, with certain alternative requirements for permitted acquisitions of at least $ 50.0 million;

• a covenant requiring us to maintain an EBITDA to interest expense ratio for a period of four consecutive fiscal quarters as of the end of each quarter of no less than 3.00 to 1;

• a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments and assuming no default exists or would result from such payment, our leverage ratio is greater than 2.50 to 1, in such case limiting such payments to $ 60.0 million during any fiscal year.

Redemption of Senior Notes

In the second quarter of 2021, the Company redeemed $ 300.0 million principal amount outstanding of its 5.625 % Senior Notes due 2025 ("Senior Notes").

We used the proceeds from the borrowings under the 2021 Credit Agreement to retire our Senior Notes and pay the $ 8.4 million call premium due upon redemption in the second quarter of 2021.

In addition, we wrote off $ 2.9 million of unamortized debt issuance costs in the second quarter of 2021.

We were in compliance with the financial covenants as of December 31, 2024.

Debt outstanding as of December 31 consisted of the following:

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Finance lease liabilities 1.2 0.6

Bank overdrafts 0.8 —

Total debt 199.5 200.6

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Long-term debt $ 198.2 $ 194.2

As of December 31, 2023, the Company is required to repay $ 6.3 million in outstanding credit facility borrowings and $ 0.1 million of current maturities of finance lease liabilities over the next 12 months.

As of December 31, 2023, we had outstanding borrowings of $ 90.0 million and $ 110.0 million under our term loan facility and revolving facility, respectively.

As of December 31, 2024, the Company is required to repay $ 0.8 million in bank overdrafts and $ 0.5 million of current maturities of finance lease liabilities over the next 12 months.

As of December 31, 2024, we had outstanding borrowings of $ 197.5 million under our revolving credit facility.

We had letters of credit and bank guarantees outstanding in the amount of $ 3.2 million, leaving approximately $ 449.3 million of unused borrowing capacity on our revolving facility.

Commitment fees on unused lines of credit for the year ended December 31, 2024 were $ 0.6 million.

The overall weighted average cost of debt is approximately 6.5 % and net of a related cross-currency swap instrument is approximately 5.0 %.

The overall weighted average cost of debt is approximately 6.1 % and net of a related cross-currency swap and interest rate swap instruments is approximately 4.3 %.

Further details regarding the cross-currency swap instrument are discussed in Note 11.

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Cash Flow Hedges

We use foreign currency exchange rate derivatives to hedge our exposure to fluctuations in exchange rates for anticipated intercompany cash transactions between Tennant Company and its subsidiaries.

We enter into these foreign exchange cross-currency swaps to hedge the foreign currency denominated cash flows associated with this intercompany loan, and accordingly, they are not speculative in nature.

These cross-currency swaps are designated as cash flow hedges.

The loan and related swaps matured in April 2022.

The Company manages its floating rate debt exposure using interest rate swaps.

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The following tables include the amounts in the consolidated statements of income in which the effects of derivative instruments are recorded and the effects of derivative instruments activity on these line items for the years ended December 31, 2024 and December 31, 2023:

Total Amount of Gain (Loss) on Cash Flow

Hedge Activity Total Amount of Gain (Loss) on Cash Flow

Total Gain (Loss) on

Hedge Activity Total Gain (Loss) on

Hedge Activity

Derivatives designated as cash flow hedges:

Net sales $ 1,243.6 $ — $ 1,092.2 $ —

Interest expense, net ( 9.1 ) 1.0 ( 13.5 ) 0.9

Net foreign currency transaction loss 0.3 — ( 1.2 ) 4.7

Net foreign currency transaction gain 0.1 — 0.3 —

Derivatives designated as fair value hedges:

Interest expense, net ( 9.1 ) 1.1 ( 13.5 ) 1.1

Net foreign currency transaction loss (gain) 0.3 ( 1.9 ) ( 1.2 ) 2.0

Net foreign currency transaction gain (loss) 0.1 3.9 0.3 ( 1.9 )

Derivatives designated as net investment hedges:

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Derivatives designated as cash flow hedges:

Net gain (loss) recognized in other comprehensive (loss) income, net of tax (a)

Net gain recognized in other comprehensive (loss) income, net of tax (a)

$ 1.8 $ 0.6 $ 3.1

Net loss reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net sales — — ( 0.3 )

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest income 2.0 0.5 1.9

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 1.0 2.0 0.5

Net gain (loss) reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net foreign currency transaction losses — — 3.6

Derivatives designated as fair value hedges:

Net gain recognized in other comprehensive loss, net of tax — 2.7 —

Net gain recognized in other comprehensive (loss) income, net of tax (a)

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 1.1 — 0.9

Derivatives designated as net investment hedges:

Net gain recognized in other comprehensive loss, net of tax 2.0 4.2 —

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest expense, net 1.0 0.7 —

Net gain recognized in other comprehensive (loss) income, net of tax (a)

Net gain reclassified from accumulated other comprehensive loss into income, net of tax, ineffective portion to interest expense, net 1.0 1.0 0.7

Derivatives not designated as hedging instruments:

Net gain (loss) recognized in income (b)

Net gain recognized in income (b)

$ 6.1 $ 1.7 $ 1.0

(a) Net change in the fair value of the effective portion classified in other comprehensive (loss) income.

(b) Classified in net foreign currency transaction losses.

(b) Classified in net foreign currency transaction gain (loss).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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Fair Value Measurements

Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable, other current assets, accounts payable and other current liabilities approximate fair value due to their short-term nature.

On February 21, 2024, the Company acquired certain investment securities in Brain Corp, a privately held autonomous technology company located in San Diego, California.

The investment will drive the development and adoption of Brain Corp's next generation of robotic and AI technologies.

The investment securities include $ 12.1 million of redeemable convertible preferred stock, accounted for as available-for-sale debt instruments.

The investment securities also include $ 12.2 million of non-redeemable convertible preferred stock and $ 7.8 million of warrants, accounted for as equity instruments under the elected measurement alternative.

The equity and debt securities were recorded at closing at their allocated fair values.

For equity instruments, the carrying amount will be adjusted to fair value through net income each period based upon observable transactions for identical or similar investments of the same issuer and monitored for impairment.

For debt instruments, the carrying amount will be adjusted to fair value each period through accumulated other comprehensive income (loss).

The securities will be measured to fair value based on Level 3 inputs.

As of December 31, 2024, and December 31, 2023, a comparison of cost and market values of our debt and equity securities was as follows:

Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses

2024 2023 2024 2023 2024 2023 2024 2023

Available-for-sale debt securities $ 12.1 $ — $ 12.3 $ — $ 0.2 $ — $ — $ —

Equity securities 20.0 — 20.0 — — — — —

Total debt and equity securities $ 32.1 — 32.3 $ — $ 0.2 $ — $ — $ —

The aggregate unrealized gains and losses on available-for-sale debt securities, net of tax effects, are classified in accumulated other comprehensive loss within shareholders' equity.

Scheduled maturities of our debt securities were as follows:

Cost Fair Value

After 5 years through 10 years $ 12.1 $ 12.3

Total debt securities $ 12.1 $ 12.3

Fair Value Measurements and Financial Statement Presentation

Estimates of fair value for financial assets and financial liabilities are based on the framework established in the accounting guidance for fair value measurements.

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Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

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Fair Value Level 1 Level 2 Level 3

Equity securities $ 20.0 $ — $ — $ 20.0

Debt securities 12.3 — — 12.3

Foreign currency forward contracts 0.8 — 0.8 —

Cross-currency swaps 3.4 — 3.4 —

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Total assets 36.6 — 4.3 32.3

Foreign currency forward exchange contracts 1.6 — 1.6 —

Foreign currency forward contracts — — — —

Cross-currency swaps — — — —

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Fair Value Level 1 Level 2 Level 3

Foreign currency forward exchange contracts $ 0.1 $ — $ 0.1 $ —

Cross-currency swaps $ 2.5 $ — $ 2.5 $ —

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Total assets 3.3 — 3.3 —

Foreign currency forward exchange contracts 0.3 — 0.3 —

Foreign currency forward contracts 1.6 — 1.6 —

Cross-currency swaps 6.7 — 6.7 —

Interest rate swaps 1.9 — 1.9 —

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Further details regarding our foreign currency forward exchange and option contracts are discussed in Note 11.

There were no transfers into or out of Level 3 investments in 2024 or 2023.

The fair value and carrying value of total debt, including current portion, was $ 235.9 million and $ 199.5 million, respectively, as of December 31, 2024.

The fair value was estimated using Level 3 inputs based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Contingent consideration is valued using a probability-weighted analysis of projected gross profit and integration milestones.

Contingent consideration payments totaling $ 2.5 million were paid in 2021.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, receivables, other current assets, accounts payable and other current liabilities approximate fair value due to their short-term nature.

The fair value and carrying value of total debt, including current portion, was $ 198.2 million and $ 200.6 million, respectively, as of December 31, 2023.

The fair value was calculated based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities, which is a Level 2 in the fair value hierarchy.

Retirement Benefit Plans

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Under this plan, we match up to 3 % of the employee’s annual compensation in cash to be invested per their election.

We also make a profit sharing contribution to the 401(k) plan for employees with more than one year of service in accordance with our Profit Sharing Plan.

This contribution is based upon our financial performance and can be funded in the form of Tennant stock, cash or a combination of both.

Expenses for the 401(k) plan were $ 10.5 million, $ 6.0 million and $ 8.7 million during 2023, 2022 and 2021, respectively.

We also make a discretionary profit sharing contribution to the 401(k) plan for employees with more than one year of service in accordance with our Profit Sharing Plan.

This contribution is based upon our financial performance and can be funded in the form of a direct deposit into the employees 401(k) account, cash, or a combination of both.

Expenses for the 401(k) plan, including profit sharing contributions, were $ 10.0 million, $ 10.5 million and $ 6.0 million during 2024, 2023 and 2022, respectively.

We have a U.S.

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In December 2018, the U.K.

Pension Plan was amended to close all future accrual of benefits to existing active members, resulting in a curtailment gain of $ 0.1 million relating to past service benefits.

Pension Plan was amended to close all future accrual of benefits to existing active members.

In December 2024, the Trustees of the U.K.

Pension Plan entered into an agreement with an insurer to acquire an insurance policy that operates as an investment asset, with the intent of matching part of the U.K.

Pension Plan’s future cash outflow arising from the accrued pension liabilities of 26 non-insured pensioner members.

Such an arrangement is commonly termed as a “partial buy-in.” The benefit obligation was not transferred to the insurer and remains with the Company.

The partial buy-in insurance contract is classified as a Level 3 investment.

The value of the insurance contract is based on significant unobservable inputs including plan participant demographics, in addition to observable inputs which include expected return on assets and estimated value premium.

The partial buy-in arrangement also allows for the possible future conversion into a buy-out arrangement where the insurance company would assume responsibility for paying the insured benefits directly to the members of the U.K.

Pension Plan, at which time the Company would derecognize the assets and liabilities of the pension plan but would, however, remain responsible for any residual risks once the U.K.

Pension Plan is wound-up.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The Italian Plan is an employee termination indemnity mandated by Italian law to all employees employed prior to 2008.

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Due to changes in Italian law, such termination indemnities are no longer available to new participants.

Prior year Non-U.S.

Pension Benefits disclosures have been updated to include the Italian Pension Plan.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

We expect to contribute less than $ 0.1 million to our U.S.

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Weighted-average asset allocations by asset category of the U.K.

Pension Plan as of December 31, 2023 are as follows:

Pension Plan as of December 31, 2024 were as follows:

Quoted Prices in Active Markets for

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$ 6.7 $ — $ — $ 6.7

Buy-in Insurance Contract (b)

Total $ 12.6 $ — $ — $ 12.6

(a) This category is comprised of investments in insurance contracts.

(b) This represents the U.K.

Pension Plan partial buy-in assets comprised of investments in insurance contracts.

Weighted-average asset allocations by asset category of the U.K.

Pension Plan as of December 31, 2022 are as follows:

Pension Plan as of December 31, 2023 were as follows:

Quoted Prices in Active Markets for

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Estimates of the fair value of the U.K.

Pension Plan and the Tennant Company Retirement Savings Plan assets are based on the framework established in the accounting guidance for fair value measurements.

Pension Plan are based on the framework established in the accounting guidance for fair value measurements.

A brief description of the three levels can be found in Note 12.

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The underlying assets held by these contracts are primarily invested in assets traded in active markets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

A reconciliation of the beginning and ending balances of the Level 3 investments of our U.K.

Pension Plan during the years ended December 31 is as follows:

Pension Plan during the years ended December 31 was as follows:

Fair value at beginning of year $ 12.7 $ 11.3

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Net (loss) gain ( 0.2 ) 1.1

Net transfer in 0.7 —

Foreign currency ( 0.2 ) 0.6

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The primary objective of our U.K.

Pension Plan is to meet retirement income commitments to plan participants at a reasonable cost to us and to maintain a sound actuarially funded status.

Pension Plan is to meet retirement income commitments to plan participants at a reasonable cost to us and to maintain a sound actuarial funded status.

This objective is accomplished through growth of capital and safety of funds invested.

Assets are invested in securities to

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

achieve growth of capital over inflation through appreciation and accumulation and reinvestment of dividend and interest income.

Assets are invested in securities to achieve growth of capital over inflation through appreciation and accumulation and reinvestment of dividend and interest income.

Investments are diversified to control risk.

Pension Plan is invested in insurance contracts with underlying investments primarily in equity and fixed income securities.

Our German Pension Plan is unfunded, which is customary in that country.

Weighted-average assumptions used to determine benefit obligations as of December 31 are as follows:

All other Pension Plans are unfunded, which is customary.

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

Nonqualified Plan Non-U.S.

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Rate of compensation increase — % — % 3.00 % 3.00 % — % — %

Weighted-average assumptions used to determine net periodic benefit costs as of December 31 are as follows:

Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows:

Nonqualified Plan Non-U.S.

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Before 2019, the FTSE (formerly known as Citigroup) Above Median Spot rates for high-quality corporate bonds were used in determining the discount rate for the U.S.

Before 2021, the iBoxx € Corporates AA 7-10 and iBoxx € Corporates AA 10+ Benchmark was used to determine the discount rate for the Italian Pension Plan.

Before 2021, the iBoxx € Corporates AA 7-10 and iBoxx € Corporates AA 10+ Benchmark were used to determine the discount rate for the Italian Pension Plan.

The expected return on assets assumption on the investment portfolios for the pension plans is based on the long-term expected returns for the investment mix of assets currently in the portfolio.

Management uses historic return trends of the asset portfolio combined with recent market conditions to estimate the future rate of return.

The accumulated benefit obligations as of December 31 for all defined benefit plans are as follows:

Management uses

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

historic return trends of the asset portfolio combined with recent market conditions to estimate the future rate of return.

The accumulated benefit obligations as of December 31 for all defined benefit plans were as follows:

Nonqualified Plan $ 0.8 $ 0.9

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Italian Pension Plan 2.4 2.5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Information for our plans with an accumulated benefit obligation in excess of plan assets as of December 31 is as follows:

Information for our plans with an accumulated benefit obligation in excess of plan assets as of December 31 was as follows:

Accumulated benefit obligation $ 4.6 $ 4.8

Fair value of plan assets — —

As of December 31, 2024 and 2023, the U.S.

Nonqualified, the German Pension, the French Pension and the Italian Pension Plans had an accumulated benefit obligation in excess of plan assets.

Information for our plans with a projected benefit obligation in excess of plan assets as of December 31 is as follows:

Information for our plans with a projected benefit obligation in excess of plan assets as of December 31 was as follows:

Projected benefit obligation $ 4.9 $ 5.0

Fair value of plan assets — —

As of December 31, 2024 and 2023, the U.S.

Nonqualified, the German Pension, the French Pension and the Italian Pension Plans had a projected benefit obligation in excess of plan assets.

Assumed healthcare cost trend rates as of December 31 are as follows:

Assumed healthcare cost trend rates as of December 31 were as follows:

Healthcare cost trend rate assumption for the next year Pre-65 7.20 % 8.00 %

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(Tables in millions, except shares and per share data)

Summaries related to changes in benefit obligations and plan assets and to the funded status of our defined benefit and postretirement medical benefit plans are as follows:

Summaries related to changes in benefit obligations and plan assets and to the funded status of our defined benefit and postretirement medical benefit plans were as follows:

Nonqualified Plan Non-U.S.

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Benefit obligation at beginning of year $ 0.9 $ 0.9 $ 10.4 $ 10.3 $ 4.6 $ 5.4

Plan combinations — — — 1.0 — —

Service cost — — 0.1 0.1 — —

Interest cost — — 0.4 0.5 0.2 0.3

Actuarial (gain) loss 0.1 ( 0.1 ) ( 0.3 ) ( 5.1 ) ( 0.7 ) ( 1.1 )

Actuarial loss (gain) — 0.1 ( 0.2 ) ( 0.3 ) 0.1 ( 0.7 )

Foreign exchange — — ( 0.4 ) 0.5 — —

Settlement — — — — — —

Net transfer in — — 0.7 — — —

Benefits paid ( 0.1 ) ( 0.1 ) ( 0.7 ) ( 0.7 ) ( 0.6 ) ( 0.4 )

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Foreign exchange — — ( 0.2 ) 0.6 — —

Settlement — — — — — —

Net transfer in — — 0.7 — — —

Benefits paid ( 0.1 ) ( 0.1 ) ( 0.7 ) ( 0.6 ) ( 0.6 ) ( 0.4 )

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Expected return on plan assets — — — ( 0.8 ) ( 0.7 ) ( 0.4 ) — — —

Amortization of net actuarial loss 0.1 0.1 — ( 0.1 ) — 0.1 ( 0.2 ) — —

Amortization of net actuarial loss (gain) 0.1 0.1 0.1 ( 0.1 ) ( 0.1 ) — ( 0.3 ) ( 0.2 ) —

Net periodic benefit cost (credit) $ 0.1 $ 0.1 $ 0.1 $ ( 0.4 ) $ ( 0.2 ) $ 0.1 $ ( 0.1 ) $ 0.1 $ 0.2

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2024 2023 2022 2024 2023 2022 2024 2023 2022

Prior service cost $ — $ — $ — $ — $ — $ — $ — $ — $ —

Net actuarial (gain) loss 0.1 ( 0.1 ) — ( 0.9 ) ( 5.0 ) 0.2 ( 0.7 ) ( 1.1 ) 0.6

Net actuarial loss (gain) 0.1 0.1 ( 0.1 ) 0.8 ( 0.9 ) ( 5.0 ) 0.1 ( 0.7 ) ( 1.1 )

Foreign exchange — — — 0.1 — — — — —

Amortization of net actuarial (loss) gain ( 0.1 ) ( 0.1 ) ( 0.1 ) 0.1 0.1 — 0.3 0.2 —

Total recognized in other comprehensive (income) loss $ — $ — $ ( 0.2 ) $ 1.0 $ ( 0.8 ) $ ( 5.0 ) $ 0.4 $ ( 0.5 ) $ ( 1.1 )

Total recognized in net benefit (credit) cost and other comprehensive (income) loss $ 0.1 $ ( 0.1 ) $ 0.1 $ ( 1.0 ) $ ( 4.9 ) $ — $ ( 0.4 ) $ ( 0.9 ) $ 0.8

Total recognized in net benefit cost (credit) and other comprehensive (income) loss $ 0.1 $ 0.1 $ ( 0.1 ) $ 0.6 $ ( 1.0 ) $ ( 4.9 ) $ 0.3 $ ( 0.4 ) $ ( 0.9 )

The following benefit payments, which reflect expected future service, are expected to be paid:

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Accumulated Other Comprehensive Loss

The changes in components of accumulated other comprehensive loss, net of tax, are as follows:

The changes in components of accumulated other comprehensive loss, net of tax, were as follows:

Foreign Currency Translation

Adjustments Pension and Postretirement

Medical Benefits Derivative Financial Instruments Total

Medical Benefits Derivative Financial Instruments Unrealized Gain on Debt Securities Total

December 31, 2022 $ ( 53.9 ) $ 2.7 $ 1.0 $ — $ ( 50.2 )

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December 31, 2024 $ ( 75.2 ) $ 2.8 $ ( 0.5 ) $ 0.2 $ ( 72.7 )

Accumulated other comprehensive loss associated with pension and postretirement benefits and cash flow hedges is included in Notes 13 and 11, respectively.

Accumulated other comprehensive loss associated with pension and postretirement benefits, derivative financial instruments, and unrealized gain on debt securities is included in Notes 13, 11 and 9, respectively.

Repurchase of Common Stock

On October 31, 2016, the Board of Directors authorized the repurchase of 1,000,000 shares of our common stock.

On February 11, 2025, the Board of Directors authorized the repurchase of up to 2,000,000 shares.

Our stock repurchase program is not subject to an expiration date.

During the year ended December 31, 2024, the Company paid $ 19.6 million to repurchase 198,352 shares of its common stock at an average price of $ 98.92 per share.

As of December 31, 2024, 623,061 shares were available to be repurchased.

The Company paid $ 5.0 million to repurchase 79,756 share repurchases during the year ended December 31, 2022.

We lease facilities, vehicles and equipment under the operating lease agreements, which include both monthly and longer-term arrangements.

Certain operating leases for vehicles contain residual value guarantee provisions, which would become due at the expiration of the operating lease agreement if the fair value of the leased vehicles is less than the guaranteed residual value.

As of December 31, 2023, of those leases that contain residual value guarantees, the aggregate residual value at lease expiration was $ 14.6 million, of which we have guaranteed $ 8.1 million.

The Company paid $ 21.7 million to repurchase 290,920 shares during the year ended December 31, 2023.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The lease assets and liabilities as of December 31 are as follows:

We lease facilities, vehicles and equipment under the operating lease agreements, which include both monthly and longer-term arrangements.

Certain operating leases for vehicles contain residual value guarantee provisions, which would generally become due at the expiration of the o perating lease agreement if the fair value of the leased vehicles is less than the guaranteed residual value.

As of December 31, 2024, the aggregate residual value guarantee related to these leases was approximately $ 24.0 million .

We believe the likelihood of funding the guarantee obligation under any provision of the operating lease agreement is remote.

The lease assets and liabilities as of December 31 were as follows:

Leases Classification 2024 2023

7 unchanged sentences

Total lease liabilities $ 56.0 $ 42.3

Finance lease assets are recorded net of accumulated amortization of $ 0.1 million and less than $ 0.1 million as of December 31, 2023 and December 31, 2022, respectively.

Finance lease assets are recorded net of accumulated amortization of $ 0.3 million and $ 0.1 million as of December 31, 2024 and December 31, 2023, respectively.

The lease cost for the three years ended December 31 was as follows:

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Includes amortization of leased assets and interest on lease liabilities.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The maturity of lease liabilities as of December 31, 2024 was as follows:

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Present value of lease liabilities $ 54.8 $ 1.2 $ 56.0

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The lease term and discount rate as of December 31 were as follows:

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In the ordinary course of business, we may become liable with respect to pending and threatened litigation, tax, environmental and other matters.

While the ultimate results of current claims, investigations and lawsuits involving us are unknown at this time, we do not expect that these matters will have a material adverse effect on our consolidated financial position or results of operations.

Legal costs associated with such matters are expensed as incurred.

Oxygenator Water Techs vs.

Tennant Company

On November 25, 2024, the Company received an adverse jury verdict in an intellectual property damages dispute in the United States District Court for the District of Minnesota.

In the dispute, Oxygenator Water Technologies, Inc.

(OWT) alleges that between 2015 and 2023 Tennant Company infringed certain of OWT’s patents through the Company’s manufacture and sale of certain component parts in ecH2O and nanoclean system options included on commercial floor scrubbers.

A jury ruled against the Company and awarded $ 9.8 million, plus prejudgment interest of $ 4.7 million, in favor of OWT.

The Company strongly disagrees with the verdict and is exploring all available options, including seeking to overturn the verdict and the resulting judgment through an appeals process.

However, based on the jury verdict, the Company has recorded an accrued expense in selling and administrative expense in the Company's Consolidated Statements of Income

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

and a current liability in the Company's Consolidated Balance Sheets for the total amount of $ 14.5 million.

As the litigation process is not predictable and can lead to unexpected results, it is possible that the Company's exposure to loss could change after the issuance of these financials.

The ruling does not impact the Company's ability to sell any of its products and is not expected to affect the Company's long-term business objectives.

Other Matters

In addition to the above matter, the Company is involved in various other claims and litigation incidental to its business.

Although the outcome of these matters cannot be determined with certainty, we do not expect that the final outcome will have a material effect on the Company's consolidated results of operations or financial position.

Income before income taxes for the three years ended December 31 was as follows:

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Total $ 104.8 $ 123.8 $ 79.5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Income tax expense (benefit) for the three years ended December 31 was as follows:

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In December 2021, the Organization for Economic Cooperation and Development (OECD), which is an international public policy setting organization comprised of member countries including the U.S., published a proposal for the establishment of a global minimum tax rate of 15% (the "Pillar Two rule").

The OECD has recommended that the Pillar Two rule become effective for fiscal years beginning on or after January 1, 2024.

To date member states are in various stages of implementing the rules through local legislation and the OECD continues to refine technical guidance.

We are closely monitoring developments of the Pillar Two rule and are currently evaluating the potential effect in each of the countries we operate in.

We do not expect this rule to have a material impact on our consolidated financial statements.

Member states have

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

begun implementing the rules through local legislation and the OECD continues to refine technical guidance.

We have considered the applicable developments under the Pillar Two rules and there is no material impact on the 2024 consolidated financial statements.

Our effective income tax rate varied from the U.S.

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Effect of changes in valuation allowances — ( 0.2 ) ( 1.2 )

Excess tax benefits on share-based compensation 1.0 1.1 1.8

Share-based payments 0.1 ( 0.4 ) ( 0.9 )

Nondeductible executive compensation 2.5 1.0 1.1

Stock based compensation ( 2.9 ) 0.1 ( 0.4 )

Research and development credit ( 1.6 ) ( 1.3 ) ( 1.5 )

1 unchanged sentence

Effective income tax rate 20.1 % 11.6 % 16.6 %

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The effect of foreign operations line item includes ( 3.7 %) and ( 12.0 %) benefits for 2024 and 2023, respectively, associated with reductions to deferred tax liabilities on undistributed foreign earnings as those cumulative earnings were reduced by current year statutory book losses.

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Fixed assets 9.2 9.5

Goodwill and intangible assets — 13.8

Capitalized implementation costs 5.0 —

Total deferred tax liabilities $ 25.5 $ 19.0

Net deferred tax assets $ 41.5 $ 37.5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Tax credit carryforwards consist of $ 3.1 million of U.S.

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Less than $ 0.3 million of these losses have a limited carryforward period.

The valuation allowance as of December 31, 2023 principally applies to tax credit carryforwards in the Netherlands and certain U.S.

states which, in the opinion of management, are more likely than not to expire unutilized.

The valuation allowance as of December 31, 2024 principally applies to foreign net operating losses as well as foreign and domestic tax credit carryforwards which, in the opinion of management, are more likely than not to expire unutilized.

However, to the extent that tax benefits related to these carryforwards are realized in the future, the reduction in the valuation allowance will reduce income tax expense.

In 2024, we recorded a net valuation allowance increase of $ 0.1 million due to the acquisition of TCS and internal restructuring.

As of December 31, 2024, we believe it is more likely than not that the remainder of our deferred tax assets are realizable.

We recorded a net valuation allowance release in 2023 of $ 0.1 million on the basis of management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized.

The net decrease in the valuation allowance was primarily driven by a change in judgment regarding the expected utilization of tax credit carryovers in the U.S.

and the Netherlands.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

Beginning balance $ 4.1 $ 4.2

1 unchanged sentence

Increases as a result of tax positions taken during the current year 0.9 1.2

Increase relating to prior period tax positions of acquired entities 1.4 —

Decreases relating to settlement with tax authorities — ( 0.2 )

16 unchanged sentences

We have five plans under which we have awarded share-based compensation grants:

The 1997 Non-Employee Directors Option Plan ("1997 Plan"), which provided for stock option grants to our non-employee Directors, the 2007 Stock Incentive Plan (“2007 Plan”), the Amended and Restated 2010 Stock Incentive Plan, as Amended (“2010 Plan”), the 2017 Stock Incentive Plan ("2017 Plan") and the 2020 Stock Incentive Plan ("2020 Plan").

As of December 31, 2023, there were 1,111,646 shares reserved for issuance under the 2007 Plan, the 2010 Plan and the 2017 Plan for outstanding compensation awards.

There were 975,475 shares available for issuance under the 2020 Plan for current and future equity awards as of December 31, 2023.

As of December 31, 2024, there were 148,502 shares subject to outstanding compensation awards under the 2007 Plan, the 2010 Plan, and the 2017 Plan.

As of December 31, 2024, there were 1,846,357 shares available for issuance under the 2020 Plan.

The Compensation Committee of the Board of Directors determines the number of shares awarded and the grant date, subject to the terms of our equity award policy.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

We recognized total share-based compensation expense of $ 11.9 million, $ 11.6 million and $ 7.8 million, respectively, during the years ended 2024, 2023 and 2022.

5 unchanged sentences

Treasury rate over the expected life at the time of grant.

Expected volatilities are based upon historical volatility of our stock over a period equal to the expected

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

life of each stock option grant.

Expected volatility is based upon historical volatility of our stock over a period equal to the expected life of each stock option grant.

Dividend yield is estimated over the expected life based on our dividend policy and historical dividends paid.

To determine the amount of compensation cost to be recognized in each period, we account for forfeitures as they occur.

The following table illustrates the valuation assumptions used for the 2023, 2022 and 2021 grants:

2023 2022 2021

We did not grant any stock options during 2024.

The following table illustrates the valuation assumptions used for the 2023 and 2022 stock option grants:

Expected volatility 35 % 34 - 34 %

6 unchanged sentences

Compensation expense equal to the grant date fair value is recognized for these awards on a straight-line basis over the awards' vesting period.

Stock options granted to employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the 2020, 2017 and 2010 Plans.

Stock options granted to employees are subject to accelerated expensing if the option holder meets the retirement definition set forth in the applicable equity and inventive plan.

The following table summarizes the activity during the year ended December 31, 2024 for stock option awards:

1 unchanged sentence

Outstanding at beginning of year 642,431 $ 70.43

Granted 60,492 72.88

Exercised ( 340,027 ) 68.88

Forfeited — —

Expired ( 450 ) 71.70

Outstanding at end of year 302,404 $ 72.18

Exercisable at end of year 247,575 $ 71.59

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2023, 2022 and 2021 was $ 24.21 , $ 23.45 and $ 22.01 , respectively.

There were no options granted during the year ended December 31, 2024.

The weighted-average grant date fair value of stock options granted during the years ended 2023 and 2022 was $ 24.21 and $ 23.45 , respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was $ 14.5 million, $ 5.9 million and $ 0.4 million, respectively.

1 unchanged sentence

The weighted-average remaining contractual life for options outstanding and exercisable as of December 31, 2024 was 5.3 years and 4.8 years, respectively.

As of December 31, 2023, there was unrecognized compensation cost for nonvested options of $ 1.5 million, which is expected to be recognized over a weighted-average period of 1.3 years.

As of December 31, 2024, there was unrecognized compensation cost related to nonvested stock options of $ 0.6 million, which is expected to be recognized over a weighted-average period of 0.9 years.

Restricted Share Awards

6 unchanged sentences

or removal by shareholders.

We use the closing share price the day before the grant date to

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

determine the fair value of our restricted share awards.

We use the closing share price the day before the grant date to determine the fair value of our restricted share awards.

Expenses for these awards are recognized over the vesting period.

6 unchanged sentences

Nonvested at end of year 86,205 $ 80.18

The weighted-average grant date fair value of restricted share awards granted during the years ended December 31, 2024, 2023 and 2022 was $ 110.16 , $ 72.88 and $ 78.78 , respectively.

The total fair value of restricted shares vested during the years ended December 31, 2024, 2023 and 2022 was $ 1.6 million, $ 0.4 million and $ 1.7 million, respectively.

As of December 31, 2023, there was $ 1.5 million of total unrecognized compensation cost related to nonvested restricted shares which is expected to be recognized over a weighted-average period of 1.7 years.

As of December 31, 2024, there was $ 2.9 million of total unrecognized compensation cost related to restricted share awards, which is expected to be recognized over a weighted-average period of 1.9 years.

Performance Share Awards

6 unchanged sentences

They are payable in stock and vest solely upon achievement of certain financial performance targets during this three-year period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The following table summarizes the activity during the year ended December 31, 2024 for nonvested performance share awards:

5 unchanged sentences

Nonvested at end of year 149,617 $ 85.94

During the year ended December 31, 2022, 43,198 performance shares vested.

There were 43,621 performance shares vested during the year ended December 31, 2021.

As of December 31, 2023, we expect to recognize $ 7.8 million of total compensation costs over a weighted-average period of 1.8 years.

The weighted-average grant date fair value of performance share awards granted during the years ended December 31, 2024, 2023 and 2022 was $ 108.97 , $ 73.12 and $ 77.19 , respectively.

As of December 31, 2024, there was $ 6.0 million of total unrecognized compensation costs related to performance share awards, which is expected to be recognized over a weighted-average period of 1.5 years.

Restricted Stock Units

1 unchanged sentence

Vested restricted stock units are paid out in stock.

We use the closing share

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

price the day before the grant date to determine the fair value of our restricted stock units.

We use the closing share price the day before the grant date to determine the fair value of our restricted stock units.

Expenses on these awards are recognized on a straight-line basis over the vesting period of the award.

6 unchanged sentences

Nonvested at end of year 132,143 $ 85.08

The weighted-average grant date fair value of restricted stock units granted during the years ended December 31, 2024, 2023 and 2022 was $106.54, $77.59 and $68.48, respectively.

The total fair value of shares vested during the years ended December 31, 2024, 2023 and 2022 was $ 2.2 million, $ 3.0 million and $ 0.5 million, respectively.

As of December 31, 2023, there was $ 3.8 million of total unrecognized compensation cost related to nonvested shares which is expected to be recognized over a weighted-average period of 1.5 years.

As of December 31, 2024, there was $ 4.2 million of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of 1.5 years.

Share-Based Liabilities

As of December 31, 2024 and 2023, we had $ 0.4 million and $ 0.4 million in total share-based liabilities recorded on our consolidated balance sheets, respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

Income Attributable to Tennant Company Per Share

19 unchanged sentences

In accordance with the objective and basic principles of the applicable accounting guidance, we aggregate our operating segments into one reportable segment that consists of the design, manufacture and sale of products used primarily in the maintenance of nonresidential surfaces.

The Company's chief operating decision maker ("CODM") is our chief executive officer.

The CODM uses net income, that is also reported on the income statement as consolidated net income, to evaluate return on assets and decide whether to reinvest profits into segments or other areas, such as acquisitions or dividends.

It is also used to monitor budget versus actual results, conduct competitive analysis by benchmarking against the Company's competitors, and assess segment performance.

Additionally, the CODM uses net income to allocate resources, evaluate performance, and make key operating decisions, considering budget-to-actual variances on a quarterly basis.

The CODM also uses gross profit to evaluate pricing, allocate resources, and assess segment performance by comparing actual results to historical and forecasted data.

Significant expenses within net income include cost of sales, research and development, and selling and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Income.

Other segment items within net income include net foreign currency transaction gain (loss), interest expense, net, other (expense) income, net, and income tax expense.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The following table presents net sales by geographic area for the three years ended December 31:

10 unchanged sentences

No single customer represents more than 10% of our consolidated net sales.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Tables in millions, except shares and per share data)

The following table presents long-lived assets by geographic area as of December 31:

11 unchanged sentences

Apart from the United States and Italy shown in the table above, there are no other individual foreign locations which have long-lived assets which represent more than 10% of our consolidated long-lived assets.

Subsequent Events

On February 21, 2024, we entered into an agreement to acquire a non-controlling preferred equity share investment in Brain Corp., a privately held autonomous technology company in San Diego, California.

The investment will drive the development and adoption of the next generation of robotic and AI technologies.

The purchase of the investment was completed on February 21, 2024 for $ 32.1 million.

The Company is currently evaluating the accounting treatment and financial statement impact of the investment.

Subsequent Event

On February 11, 2025, the Board of Directors authorized the repurchase of up to 2,000,000 shares of our common stock from time to time in the open market or in privately negotiated transactions, pursuant to a newly authorized share repurchase program.

The share repurchase program is in addition to the 2016 share repurchase program .

ITEM 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data