
19.	Separate Financial Information of Guarantor Subsidiaries

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

In 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 Operations and the Condensed Consolidated Statements of Comprehensive Income (Loss) for each of the three months ended March 31, 2018 and March 31, 2017, the related Condensed Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017, and the related Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and March 31, 2017, of Tennant Company ("Parent"), the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and elimination entries necessary to consolidate 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 Operations
For the three months ended March 31, 2018
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Sales	$	113,690		$	148,433		$	140,395		$	(129,671	)	$	272,847
Cost of Sales	77,231			123,125			90,245			(128,391		)	162,210
Gross Profit	36,459			25,308			50,150			(1,280		)	110,637

Operating Expense:
Research and Development Expense	6,107			204			1,685			—			7,996
Selling and Administrative Expense	29,088			19,717			43,464			—			92,269
Total Operating Expense	35,195			19,921			45,149			—			100,265
Profit from Operations	1,264			5,387			5,001			(1,280		)	10,372

Other Income (Expense):
Equity in Earnings of Affiliates	4,375			506			2,647			(7,528		)	—
Interest (Expense) Income, Net	(5,108		)	—			121			(9		)	(4,996		)
Intercompany Interest Income (Expense)	3,725			(1,422		)	(2,303		)	—			—
Net Foreign Currency Transaction Gains (Losses)	354			(1		)	(1,102		)	—			(749		)
Other (Expense) Income, Net	(233		)	(591		)	598			(24		)	(250		)
Total Other Income (Expense), Net	3,113			(1,508		)	(39		)	(7,561		)	(5,995		)

Profit (Loss) Before Income Taxes	4,377			3,879			4,962			(8,841		)	4,377
Income Tax Expense (Benefit)	1,077			899			1,589			(2,488		)	1,077
Net Earnings (Loss) Including Noncontrolling Interest	3,300			2,980			3,373			(6,353		)	3,300
Net Earnings Attributable to Noncontrolling Interest	26			—			26			(26		)	26
Net Earnings (Loss) Attributable to Tennant Company	$	3,274		$	2,980		$	3,347		$	(6,327	)	$	3,274



Condensed Consolidated Statement of Operations
For the three months ended March 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Sales	$	105,705		$	139,080		$	68,834		$	(122,560	)	$	191,059
Cost of Sales	71,597			112,732			48,582			(121,588		)	111,323
Gross Profit	34,108			26,348			20,252			(972		)	79,736

Operating Expense:
Research and Development Expense	7,946			87			413			—			8,446
Selling and Administrative Expense	32,064			20,072			21,820			—			73,956
Total Operating Expense	40,010			20,159			22,233			—			82,402
(Loss) Profit from Operations	(5,902		)	6,189			(1,981		)	(972		)	(2,666		)

Other Income (Expense):
Equity in Earnings of Affiliates	1,650			329			—			(1,979		)	—
Interest (Expense) Income, Net	(764		)	—			54			—			(710		)
Intercompany Interest Income (Expense)	1,469			(1,428		)	(41		)	—			—
Net Foreign Currency Transaction (Losses) Gains	(837		)	2			(362		)	—			(1,197		)
Other (Expense) Income, Net	(157		)	(75		)	264			—			32
Total Other Income (Expense), Net	1,361			(1,172		)	(85		)	(1,979		)	(1,875		)

(Loss) Profit Before Income Taxes	(4,541		)	5,017			(2,066		)	(2,951		)	(4,541		)
Income Tax (Benefit) Expense	(584		)	1,571			(1,024		)	(547		)	(584		)
Net (Loss) Earnings	$	(3,957	)	$	3,446		$	(1,042	)	$	(2,404	)	$	(3,957	)



Condensed Consolidated Statement of Comprehensive Income
For the three months ended March 31, 2018
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net Earnings Including Noncontrolling Interest	$	3,300		$	2,980		$	3,373		$	(6,353	)	$	3,300
Other Comprehensive Income (Loss):
Foreign currency translation adjustments	8,381			(164		)	7,853			(7,689		)	8,381
Pension and retiree medical benefits	82			—			19			(19		)	82
Cash flow hedge	(2,715		)	—			—			—			(2,715		)
Income Taxes:
Foreign currency translation adjustments	(17		)	—			(16		)	16			(17		)
Pension and retiree medical benefits	(151		)	—			—			—			(151		)
Cash flow hedge	(501		)	—			—			—			(501		)
Total Other Comprehensive Income, net of tax	5,079			(164		)	7,856			(7,692		)	5,079

Total Comprehensive Income Including Noncontrolling Interest	8,379			2,816			11,229			(14,045		)	8,379
Comprehensive Income Attributable to Noncontrolling Interest	26			—			26			(26		)	26
Comprehensive Income Attributable to Tennant Company	$	8,353		$	2,816		$	11,203		$	(14,019	)	$	8,353



Condensed Consolidated Statement of Comprehensive Income
For the three months ended March 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
Net (Loss) Earnings	$	(3,957	)	$	3,446	$	(1,042	)	$	(2,404	)	$	(3,957	)
Other Comprehensive Income (Loss):
Foreign currency translation adjustments	2,400			101		(20,697		)	20,596			2,400
Pension and retiree medical benefits	10			—		—			—			10
Cash flow hedge	(73		)	—		—			—			(73		)
Income Taxes:
Foreign currency translation adjustments	—			—		—			—			—
Pension and retiree medical benefits	(18		)	—		(14		)	14			(18		)
Cash flow hedge	27			—		—			—			27
Total Other Comprehensive Income (Loss), net of tax	2,346			101		(20,711		)	20,610			2,346
Comprehensive (Loss) Income	$	(1,611	)	$	3,547	$	(21,753	)	$	18,206		$	(1,611	)



Condensed Consolidated Balance Sheet
As of March 31, 2018
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
ASSETS
Current Assets:
Cash and Cash Equivalents	$	14,767		$	2,078		$	37,156		$	—		$	54,001
Restricted Cash	—			—			645			—			645
Net Receivables	605			85,079			126,581			—			212,265
Intercompany Receivables	54,461			131,279			—			(185,740		)	—
Inventories	32,287			16,076			102,161			(10,234		)	140,290
Prepaid Expenses	11,781			275			9,481			—			21,537
Other Current Assets	3,864			404			1,674			—			5,942
Total Current Assets	117,765			235,191			277,698			(195,974		)	434,680
Property, Plant and Equipment	224,426			12,738			149,966			—			387,130
Accumulated Depreciation	(148,975		)	(6,502		)	(53,727		)	—			(209,204		)
Property, Plant and Equipment, Net	75,451			6,236			96,239			—			177,926
Deferred Income Taxes	2,178			3,233			9,421			—			14,832
Investment in Affiliates	408,509			11,562			22,260			(442,331		)	—
Intercompany Loans	314,905			—			3,690			(318,595		)	—
Goodwill	12,869			1,739			181,557			—			196,165
Intangible Assets, Net	2,974			2,862			166,461			—			172,297
Other Assets	9,083			(427		)	11,346			—			20,002
Total Assets	$	943,734		$	260,396		$	768,672		$	(956,900	)	$	1,015,902
LIABILITIES AND TOTAL EQUITY
Current Liabilities:
Current Portion of Long-Term Debt	$	29,460		$	—		$	1,442		$	—		$	30,902
Accounts Payable	42,583			4,029			56,090			—			102,702
Intercompany Payables	131,279			1,360			53,101			(185,740		)	—
Employee Compensation and Benefits	8,976			8,194			17,504			—			34,674
Income Taxes Payable	341			—			2,459			—			2,800
Other Current Liabilities	27,447			10,780			32,066			—			70,293
Total Current Liabilities	240,086			24,363			162,662			(185,740		)	241,371
Long-Term Liabilities:
Long-Term Debt	340,447			—			1,973			—			342,420
Intercompany Loans	3,690			128,000			186,905			(318,595		)	—
Employee-Related Benefits	12,576			1,869			8,949			—			23,394
Deferred Income Taxes	—			—			53,412			—			53,412
Other Liabilities	39,564			2,669			5,701			—			47,934
Total Long-Term Liabilities	396,277			132,538			256,940			(318,595		)	467,160
Total Liabilities	636,363			156,901			419,602			(504,335		)	708,531
Equity:
Common Stock	6,717			—			11,131			(11,131		)	6,717
Additional Paid-In Capital	18,295			77,551			384,460			(462,011		)	18,295
Retained Earnings	297,717			26,777			(17,872		)	(8,905		)	297,717
Accumulated Other Comprehensive Loss	(17,244		)	(833		)	(30,535		)	31,368			(17,244		)
Total Tennant Company Shareholders' Equity	305,485			103,495			347,184			(450,679		)	305,485
Noncontrolling Interest	1,886			—			1,886			(1,886		)	1,886
Total Equity	307,371			103,495			349,070			(452,565		)	307,371
Total Liabilities and Total Equity	$	943,734		$	260,396		$	768,672		$	(956,900	)	$	1,015,902



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 Statement of Cash Flows
For the three months ended March 31, 2018
(in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
OPERATING ACTIVITIES
Net Cash Provided by (Used in) Operating Activities	$	5,815		$	1,800		$	(2,076	)	$	—		$	5,539
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(342		)	(229		)	(2,909		)	—			(3,480		)
Proceeds from Disposals of Property, Plant and Equipment	11			—			5			—			16
Proceeds from Principal Payments Received on Long-Term Note Receivable	—			—			167			—			167
Purchase of Intangible Asset	(1,000		)	—			—			—			(1,000		)
Loan (Payments) Borrowings from Subsidiaries	(1,294		)	—			—			1,294			—
Net Cash Used in Investing Activities	(2,625		)	(229		)	(2,737		)	1,294			(4,297		)
FINANCING ACTIVITIES
Loan Borrowings (Payments) from Parent	—			—			1,294			(1,294		)	—
Payments of Long-Term Debt	(4,000		)	—			(37		)	—			(4,037		)
Change in Capital Lease Obligations	—			—			81			—			81
Proceeds from Issuances of Common Stock	794			—			—			—			794
Dividends Paid	(3,758		)	—			—			—			(3,758		)
Net Cash (Used in) Provided by Financing Activities	(6,964		)	—			1,338			(1,294		)	(6,920		)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	72			—			1,201			—			1,273
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash	(3,702		)	1,571			(2,274		)	—			(4,405		)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	18,469			507			40,075			—			59,051
Cash, Cash Equivalents and Restricted Cash at End of Period	$	14,767		$	2,078		$	37,801		$	—		$	54,646



Condensed Consolidated Statement of Cash Flows
For the three months ended March 31, 2017
(in thousands)	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total Tennant Company
OPERATING ACTIVITIES
Net Cash (Used in) Provided by Operating Activities	$	(14,063	)	$	438	$	2,516		$	—		$	(11,109	)
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(1,188		)	—		(3,485		)	—			(4,673		)
Proceeds from Disposals of Property, Plant and Equipment	6			—		47			—			53
Issuance of Long-Term Note Receivable	—			—		(1,500		)	—			(1,500		)
Acquisition of Business, Net of Cash Acquired	(304		)	—		—			—			(304		)
Purchase of Intangible Asset	(2,500		)	—		—			—			(2,500		)
Change in Investments in Subsidiaries	(3,500		)	—		—			3,500			—
Net Cash Used in Investing Activities	(7,486		)	—		(4,938		)	3,500			(8,924		)
FINANCING ACTIVITIES
Change in Subsidiary Equity	—			—		3,500			(3,500		)	—
Proceeds from Issuance of Long-Term Debt	20,000			—		—			—			20,000
Payments of Long-Term Debt	(11,143		)	—		(8		)	—			(11,151		)
Proceeds from Issuance of Common Stock	1,655			—		—			—			1,655
Dividends Paid	(3,722		)	—		—			—			(3,722		)
Net Cash Provided by Financing Activities	6,790			—		3,492			(3,500		)	6,782
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(102		)	—		432			—			330
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash	(14,861		)	438		1,502			—			(12,921		)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	38,484			226		19,840			—			58,550
Cash, Cash Equivalents and Restricted Cash at End of Period	$	23,623		$	664	$	21,342		$	—		$	45,629