
22.	Separate Financial Information of Guarantor Subsidiaries

The following condensed consolidating guarantor financial information is presented to comply with the requirements of Rule 3-10 of Regulation S-X.

On April 18, 2017, we issued and sold $300,000 in aggregate principal amount of our 5.625% Senior Notes due 2025 (the “Notes”), pursuant to an Indenture, dated as of April 18, 2017, among the company, the Guarantors (as defined below), and Wells Fargo Bank, National Association, a national banking association, as trustee. The Notes are unconditionally and jointly and severally guaranteed by Tennant Coatings, Inc. and Tennant Sales and Service Company (collectively, the “Guarantors”), which are wholly owned subsidiaries of the company.

The Notes and the guarantees constitute senior unsecured obligations of the company and the Guarantors, respectively. The Notes and the guarantees, respectively, are: (a) equal in right of payment with all of the company’s and the Guarantors’ senior debt, without giving effect to collateral arrangements; (b) senior in right of payment to all of the company’s and the Guarantors’ future subordinated debt, if any; (c) effectively subordinated in right of payment to all of the company’s and the Guarantors’ debt and obligations that are secured, including borrowings under the company’s senior secured credit facilities for so long as the senior secured credit facilities are secured, to the extent of the value of the assets securing such liens; and (d) structurally subordinated in right of payment to all liabilities (including trade payables) of the company’s and the Guarantors’ subsidiaries that do not guarantee the Notes.

The following condensed consolidated financial information presents the Condensed Consolidated Statements of Earnings, Comprehensive Income and Cash Flows for each of the years in the three-year period ended December 31, 2017, and the related Condensed Consolidated Balance Sheets as of December 31, 2017 and 2016, of Tennant Company ("Parent"), the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and elimination entries necessary to consolidated the Parent with the Guarantor and Non-Guarantor Subsidiaries. The following condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the company and notes thereto of which this note is an integral part.



Condensed Consolidated Statement of Earnings
For the year ended December 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Sales	$	454,703		$	594,405		$	471,559		$	(517,601	)	$	1,003,066
Cost of Sales	311,897			488,972			317,151			(519,375		)	598,645
Gross Profit	142,806			105,433			154,408			1,774			404,421
Operating Expense:
Research and Development Expense	27,219			315			4,479			—			32,013
Selling and Administrative Expense	116,388			78,516			150,460			—			345,364
Total Operating Expense	143,607			78,831			154,939			—			377,377
(Loss) Profit from Operations	(801		)	26,602			(531		)	1,774			27,044
Other Income (Expense):
Equity in Earnings of Affiliates	12,754			2,004			28,855			(43,613		)	—
Interest Expense, Net	(22,659		)	—			(299		)	(31		)	(22,989		)
Intercompany Interest Income (Expense)	12,519			(5,776		)	(6,743		)	—			—
Net Foreign Currency Transaction Gains (Losses)	857			—			(4,244		)	—			(3,387		)
Other (Expense) Income, Net	(3,962		)	(736		)	2,841			(103		)	(1,960		)
Total Other (Expense) Income, Net	(491		)	(4,508		)	20,410			(43,747		)	(28,336		)
(Loss) Profit Before Income Taxes	(1,292		)	22,094			19,879			(41,973		)	(1,292		)
Income Tax Expense (Benefit)	4,913			8,070			(98		)	(7,972		)	4,913
Net (Loss) Earnings Including Noncontrolling Interest	(6,205		)	14,024			19,977			(34,001		)	(6,205		)
Net Loss Attributable to Noncontrolling Interest	(10		)	—			(10		)	10			(10		)
Net (Loss) Earnings Attributable to Tennant Company	$	(6,195	)	$	14,024		$	19,987		$	(34,011	)	$	(6,195	)



Condensed Consolidated Statement of Earnings
For the year ended December 31, 2016
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations				Total Tennant Company
Net Sales	$	455,375		$	587,815		$	290,349		$	(524,967	)		$	808,572
Cost of Sales	299,459			483,075			199,336			(524,893		)		456,977
Gross Profit	155,916			104,740			91,013			(74		)		351,595
Operating Expense:
Research and Development Expense	32,378			429			1,931			—				34,738
Selling and Administrative Expense	95,189			74,643			78,378			—			—	248,210
(Gain) Loss on Sale of Business	(82		)	—			231			—				149
Total Operating Expense	127,485			75,072			80,540			—				283,097
Profit from Operations	28,431			29,668			10,473			(74		)		68,498
Other Income (Expense):
Equity in Earnings of Affiliates	34,068			2,192			—			(36,260		)		—
Interest (Expense) Income, Net	(1,204		)	—			255			—				(949		)
Intercompany Interest Income (Expense)	7,157			(5,570		)	(1,587		)	—				—
Net Foreign Currency Transaction Gains (Losses)	648			(652		)	(388		)	—				(392		)
Other (Expense) Income, Net	(2,609		)	(573		)	2,516			—				(666		)
Total Other Income (Expense), Net	38,060			(4,603		)	796			(36,260		)		(2,007		)
Profit Before Income Taxes	66,491			25,065			11,269			(36,334		)		66,491
Income Tax Expense	19,877			9,443			2,427			(11,870		)		19,877
Net Earnings	$	46,614		$	15,622		$	8,842		$	(24,464	)		$	46,614



Condensed Consolidated Statement of Earnings
For the year ended December 31, 2015
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Sales	$	480,418		$	586,154		$	306,506		$	(561,279	)	$	811,799
Cost of Sales	320,620			489,203			213,085			(560,169		)	462,739
Gross Profit	159,798			96,951			93,421			(1,110		)	349,060
Operating Expense:
Research and Development Expense	29,888			389			2,138			—			32,415
Selling and Administrative Expense	97,301			72,954			82,015			—			252,270
Impairment of Long-Lived Assets	—			—			11,199			—			11,199
Total Operating Expense	127,189			73,343			95,352			—			295,884
Profit (Loss) from Operations	32,609			23,608			(1,931		)	(1,110		)	53,176
Other Income (Expense):
Equity in Earnings of Affiliates	14,766			2,122			—			(16,888		)	—
Interest (Expense) Income, Net	(1,221		)	—			80			—			(1,141		)
Intercompany Interest Income (Expense)	7,368			(5,400		)	(1,968		)	—			—
Net Foreign Currency Transaction Gains (Losses)	535			(777		)	(712		)	—			(954		)
Other (Expense) Income, Net	(3,633		)	(422		)	3,398			—			(657		)
Total Other Income (Expense), Net	17,815			(4,477		)	798			(16,888		)	(2,752		)
Profit (Loss) Before Income Taxes	50,424			19,131			(1,133		)	(17,998		)	50,424
Income Tax Expense	18,336			4,619			1,630			(6,249		)	18,336
Net Earnings (Loss)	$	32,088		$	14,512		$	(2,763	)	$	(11,749	)	$	32,088



Condensed Consolidated Statement of Comprehensive Income
For the year ended December 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Earnings	$	(6,205	)	$	14,024	$	19,977		$	(34,001	)	$	(6,205	)
Other Comprehensive Income (Loss):
Foreign currency translation adjustments	28,356			1,215		2,960			(4,175		)	28,356
Pension and retiree medical benefits	5,868			—		538			(538		)	5,868
Cash flow hedge	(7,731		)	—		—			—			(7,731		)
Income Taxes:
Foreign currency translation adjustments	310			—		310			(310		)	310
Pension and retiree medical benefits	(2,087		)	—		(99		)	99			(2,087		)
Cash flow hedge	2,884			—		—			—			2,884
Total Other Comprehensive (Loss) Income, net of tax	27,600			1,215		3,709			(4,924		)	27,600
Total Comprehensive Income Including Noncontrolling Interest	21,395			15,239		23,686			(38,925		)	21,395
Comprehensive Loss Attributable to Noncontrolling Interest	(10		)	—		(10		)	10			(10		)
Comprehensive Income Attributable to Tennant Company	$	21,405		$	15,239	$	23,696		$	(38,935	)	$	21,405



Condensed Consolidated Statement of Comprehensive Income
For the year ended December 31, 2016
(in thousands)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Earnings	$	46,614		$	15,622	$	8,842		$	(24,464	)	$	46,614
Other Comprehensive Income (Loss):
Foreign currency translation adjustments	109			270		3,534			(3,804		)	109
Pension and retiree medical benefits	(2,248		)	—		(1,691		)	1,691			(2,248		)
Cash flow hedge	(305		)	—		—			—			(305		)
Income Taxes:
Foreign currency translation adjustments	32			—		32			(32		)	32
Pension and retiree medical benefits	504			—		296			(296		)	504
Cash flow hedge	114			—		—			—			114
Total Other Comprehensive (Loss) Income, net of tax	(1,794		)	270		2,171			(2,441		)	(1,794		)
Comprehensive Income	$	44,820		$	15,892	$	11,013		$	(26,905	)	$	44,820



Condensed Consolidated Statement of Comprehensive Income
For the year ended December 31, 2015
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Earnings	$	32,088		$	14,512		$	(2,763	)	$	(11,749	)	$	32,088
Other Comprehensive (Loss) Income:
Foreign currency translation adjustments	(12,520		)	(1,082		)	(12,903		)	13,985			(12,520		)
Pension and retiree medical benefits	4,121			—			1,571			(1,571		)	4,121
Cash flow hedge	164			—			—			—			164
Income Taxes:
Foreign currency translation adjustments	25			—			25			(25		)	25
Pension and retiree medical benefits	(1,265		)	—			(314		)	314			(1,265		)
Cash flow hedge	(61		)	—			—			—			(61		)
Total Other Comprehensive Loss, net of tax	(9,536		)	(1,082		)	(11,621		)	12,703			(9,536		)
Comprehensive Income (Loss)	$	22,552		$	13,430		$	(14,384	)	$	954		$	22,552



Condensed Consolidated Balance Sheet
As of December 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
ASSETS
Current Assets:
Cash and Cash Equivalents	$	18,469		$	507		$	39,422		$	—		$	58,398
Restricted Cash	—			—			653			—			653
Net Receivables	683			88,629			120,204			—			209,516
Intercompany Receivables	53,444			133,778			—			(187,222		)	—
Inventories	29,450			12,695			94,542			(8,993		)	127,694
Prepaid Expenses	8,774			1,172			9,405			—			19,351
Other Current Assets	4,030			—			3,473			—			7,503
Total Current Assets	114,850			236,781			267,699			(196,215		)	423,115
Property, Plant and Equipment	225,064			12,155			145,549			—			382,768
Accumulated Depreciation	(146,320		)	(6,333		)	(50,097		)	—			(202,750		)
Property, Plant and Equipment, Net	78,744			5,822			95,452			—			180,018
Deferred Income Taxes	1,308			2,669			7,157			—			11,134
Investment in Affiliates	392,486			11,273			20,811			(424,570		)	—
Intercompany Loans	304,822			—			4,983			(309,805		)	—
Goodwill	12,869			1,739			171,436			—			186,044
Intangible Assets, Net	2,105			2,898			167,344			—			172,347
Other Assets	10,363			—			10,956			—			21,319
Total Assets	$	917,547		$	261,182		$	745,838		$	(930,590	)	$	993,977
LIABILITIES AND TOTAL EQUITY
Current Liabilities:
Current Portion of Long-Term Debt	$	29,413		$	—		$	1,470		$	—		$	30,883
Accounts Payable	39,927			3,018			53,137			—			96,082
Intercompany Payables	133,778			1,963			51,481			(187,222		)	—
Employee Compensation and Benefits	8,311			10,355			18,591			—			37,257
Income Taxes Payable	366			—			2,472			—			2,838
Other Current Liabilities	20,183			15,760			33,504			—			69,447
Total Current Liabilities	231,978			31,096			160,655			(187,222		)	236,507
Long-Term Liabilities:
Long-Term Debt	344,147			—			1,809			—			345,956
Intercompany Loans	—			128,000			181,805			(309,805		)	—
Employee-Related Benefits	11,160			3,992			8,715			—			23,867
Deferred Income Taxes	—			—			53,225			—			53,225
Other Liabilities	31,788			2,483			1,677			—			35,948
Total Long-Term Liabilities	387,095			134,475			247,231			(309,805		)	458,996
Total Liabilities	619,073			165,571			407,886			(497,027		)	695,503
Equity:
Common Stock	6,705			—			11,131			(11,131		)	6,705
Additional Paid-In Capital	15,089			72,483			384,460			(456,943		)	15,089
Retained Earnings	297,032			23,797			(21,219		)	(2,578		)	297,032
Accumulated Other Comprehensive Loss	(22,323		)	(669		)	(38,391		)	39,060			(22,323		)
Total Tennant Company Shareholders’ Equity	296,503			95,611			335,981			(431,592		)	296,503
Noncontrolling Interest	1,971			—			1,971			(1,971		)	1,971
Total Equity	298,474			95,611			337,952			(433,563		)	298,474
Total Liabilities and Total Equity	$	917,547		$	261,182		$	745,838		$	(930,590	)	$	993,977



Condensed Consolidated Balance Sheet
As of December 31, 2016
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
ASSETS
Current Assets:
Cash and Cash Equivalents	$	38,484		$	226		$	19,323		$	—		$	58,033
Restricted Cash	—			—			517			—			517
Net Receivables	209			85,219			63,706			—			149,134
Intercompany Receivables	50,437			123,289			2,251			(175,977		)	—
Inventories	26,422			12,821			49,829			(10,450		)	78,622
Prepaid Expenses	4,120			1,151			3,933			—			9,204
Other Current Assets	2,402			—			10			—			2,412
Total Current Assets	122,074			222,706			139,569			(186,427		)	297,922
Property, Plant and Equipment	225,651			12,996			59,853			—			298,500
Accumulated Depreciation	(144,281		)	(6,175		)	(35,947		)	—			(186,403		)
Property, Plant and Equipment, Net	81,370			6,821			23,906			—			112,097
Deferred Income Taxes	3,048			3,281			7,110			—			13,439
Investment in Affiliates	157,004			9,021			—			(166,025		)	—
Intercompany Loans	130,000			—			—			(130,000		)	—
Goodwill	12,869			1,439			6,757			—			21,065
Intangible Assets, Net	—			3,200			3,260			—			6,460
Other Assets	10,189			27			8,838			—			19,054
Total Assets	$	516,554		$	246,495		$	189,440		$	(482,452	)	$	470,037
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-Term Debt	$	3,429		$	—		$	30		$	—		$	3,459
Accounts Payable	30,867			2,599			13,942			—			47,408
Intercompany Payables	125,540			1,249			49,188			(175,977		)	—
Employee Compensation and Benefits	12,025			15,261			8,711			—			35,997
Income Taxes Payable	1,410			—			938			—			2,348
Other Current Liabilities	15,329			13,348			14,940			—			43,617
Total Current Liabilities	188,600			32,457			87,749			(175,977		)	132,829
Long-Term Liabilities:
Long-Term Debt	32,714			—			21			—			32,735
Intercompany Loans	—			128,000			2,000			(130,000		)	—
Employee-Related Benefits	14,291			3,704			3,139			—			21,134
Deferred Income Taxes	—			—			171			—			171
Other Liabilities	2,406			1,295			924			—			4,625
Total Long-Term Liabilities	49,411			132,999			6,255			(130,000		)	58,665
Total Liabilities	238,011			165,456			94,004			(305,977		)	191,494
Shareholders' Equity:
Common Stock	6,633			—			11,131			(11,131		)	6,633
Additional Paid-In Capital	3,653			72,483			158,592			(231,075		)	3,653
Retained Earnings	318,180			9,771			(32,187		)	22,416			318,180
Accumulated Other Comprehensive Loss	(49,923		)	(1,215		)	(42,100		)	43,315			(49,923		)
Total Shareholders’ Equity	278,543			81,039			95,436			(176,475		)	278,543
Total Liabilities and Shareholders’ Equity	$	516,554		$	246,495		$	189,440		$	(482,452	)	$	470,037



Condensed Consolidated Statement of Cash Flows
For the year ended December 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
OPERATING ACTIVITIES
Net Cash Provided by Operating Activities	$	26,992		$	280	$	27,711		$	(809	)	$	54,174
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(9,558		)	—		(10,879		)	—			(20,437		)
Proceeds from Disposals of Property, Plant and Equipment	23			1		2,487			—			2,511
Proceeds from Principal Payments Received on Long-Term Note Receivable	—			—		667			—			667
Issuance of Long-Term Note Receivable	—			—		(1,500		)	—			(1,500		)
Acquisition of Businesses, Net of Cash Acquired	(304		)	—		(353,769		)	—			(354,073		)
Purchase of Intangible Asset	(2,500		)	—		—			—			(2,500		)
Change in Investments in Subsidiaries	(199,028		)	—		—			199,028			—
Loan (Payments) Borrowings from Subsidiaries	(159,780		)	—		(4,983		)	164,763			—
Increase in Restricted Cash	—			—		(92		)	—			(92		)
Net Cash (Used in) Provided by Investing Activities	(371,147		)	1		(368,069		)	363,791			(375,424		)
FINANCING ACTIVITIES
Proceeds from Short-Term Debt	303,000			—		—			—			303,000
Repayments of Short-Term Debt	(303,000		)	—		—			—			(303,000		)
Loan Borrowings (Payments) from Parent	4,983			—		159,780			(164,763		)	—
Change in Subsidiary Equity	—			—		199,028			(199,028		)	—
Proceeds from Issuance of Long-Term Debt	440,000			—		—			—			440,000
Payments of Long-Term Debt	(96,142		)	—		(106		)	—			(96,248		)
Payments of Debt Issuance Costs	(16,482		)	—		—			—			(16,482		)
Change in Capital Lease Obligations	—			—		311			—			311
Proceeds from Issuances of Common Stock	6,875			—		—			—			6,875
Purchase of Noncontrolling Owner Interest	—			—		(30		)	—			(30		)
Dividends Paid	(14,953		)	—		(809		)	809			(14,953		)
Net Cash Provided by Financing Activities	324,281			—		358,174			(362,982		)	319,473
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(141		)	—		2,283			—			2,142
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(20,015		)	281		20,099			—			365
Cash and Cash Equivalents at Beginning of Year	38,484			226		19,323			—			58,033
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	18,469		$	507	$	39,422		$	—		$	58,398



Condensed Consolidated Statement of Cash Flows
For the year ended December 31, 2016
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
OPERATING ACTIVITIES
Net Cash Provided by Operating Activities	$	44,147		$	239		$	14,090		$	(598	)	$	57,878
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(21,507		)	(13		)	(5,006		)	—			(26,526		)
Proceeds from Disposals of Property, Plant and Equipment	377			—			238			—			615
Acquisition of Businesses, Net of Cash Acquired	—			(11,539		)	(1,394		)	—			(12,933		)
Issuance of Long-Term Note Receivable	—			—			(2,000		)	—			(2,000		)
Proceeds from Sale of Business	—			—			285			—			285
Change in Investments in Subsidiaries	(19,594		)	—			—			19,594			—
Loan Borrowings (Payments) from Subsidiaries	8,690			—			—			(8,690		)	—
Decrease in Restricted Cash	—			—			116			—			116
Net Cash Used in Investing Activities	(32,034		)	(11,552		)	(7,761		)	10,904			(40,443		)
FINANCING ACTIVITIES
Loan Borrowings (Payments) from Parent	—			7,969			(16,659		)	8,690			—
Change in Subsidiary Equity	—			3,570			16,024			(19,594		)	—
Payments of Long-Term Debt	(3,429		)	—			(31		)	—			(3,460		)
Proceeds from Issuance of Long-Term Debt	15,000			—			—			—			15,000
Purchases of Common Stock	(12,762		)	—			—			—			(12,762		)
Proceeds from Issuances of Common Stock	5,271			—			—			—			5,271
Excess Tax Benefit on Stock Plans	686			—			—			—			686
Dividends Paid	(14,293		)	—			(598		)	598			(14,293		)
Net Cash (Used in) Provided by Financing Activities	(9,527		)	11,539			(1,264		)	(10,306		)	(9,558		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	64			—			(1,208		)	—			(1,144		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	2,650			226			3,857			—			6,733
Cash and Cash Equivalents at Beginning of Year	35,834			—			15,466			—			51,300
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	38,484		$	226		$	19,323		$	—		$	58,033



Condensed Consolidated Statement of Cash Flows
For the year ended December 31, 2015
(in thousands)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
OPERATING ACTIVITIES
Net Cash Provided by Operating Activities	$	40,764		$	—	$	4,928		$	(460	)	$	45,232
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(19,149		)	—		(5,631		)	—			(24,780		)
Proceeds from Disposals of Property, Plant and Equipment	32			—		304			—			336
Loan Borrowings (Payments) from Subsidiaries	268			—		—			(268		)	—
Proceeds from Sale of Business	—			—		1,185			—			1,185
Increase in Restricted Cash	—			—		(322		)	—			(322		)
Net Cash Used in Investing Activities	(18,849		)	—		(4,464		)	(268		)	(23,581		)
FINANCING ACTIVITIES
Loan (Payments) Borrowings from Parent	—			—		(268		)	268			—
Payments of Long-Term Debt	(3,435		)	—		(10		)	—			(3,445		)
Purchases of Common Stock	(45,998		)	—		—			—			(45,998		)
Proceeds from Issuances of Common Stock	1,677			—		—			—			1,677
Excess Tax Benefit on Stock Plans	859			—		—			—			859
Dividends Paid	(14,498		)	—		(460		)	460			(14,498		)
Net Cash Used in Financing Activities	(61,395		)	—		(738		)	728			(61,405		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	79			—		(1,987		)	—			(1,908		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(39,401		)	—		(2,261		)	—			(41,662		)
Cash and Cash Equivalents at Beginning of Year	75,235			—		17,727			—			92,962
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	35,834		$	—	$	15,466		$	—		$	51,300