TENNANT COTNC
TENNANT CO Fair Value Disclosure
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 headquartered in San Diego, California. The investment consists of $12.1 million of redeemable convertible preferred stock, $12.2 million of non-redeemable convertible preferred stock, and $7.8 million of warrants. The redeemable convertible preferred stock is accounted for as an available-for-sale debt security. The non-redeemable convertible preferred stock and warrants are accounted for as equity securities. All securities were recorded at their allocated fair value at the acquisition date.
In December 2025, the Company obtained the ability to exercise significant influence over Brain Corp and, as a result, adopted the equity method of accounting for its equity securities investment. As of December 31, 2025, the investment is accounted for under the equity method (see Note 13 – Equity Method Investments).
The available-for-sale debt security is carried at fair value with changes in fair value recognized in accumulated other comprehensive income (loss). The Company estimates fair value using Level 3 inputs.
As of December 31, 2025, and December 31, 2024, 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 | ||||||||||||||||||||
Balance as of December 31, 2025 | |||||||||||||||||||||||
| Available-for-sale debt securities | $ | 12.1 | $ | 11.8 | $ | — | $ | (0.3) | |||||||||||||||
| Total debt securities | $ | 12.1 | $ | 11.8 | $ | — | $ | (0.3) | |||||||||||||||
Balance as of December 31, 2024 | |||||||||||||||||||||||
| 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 | $ | 11.8 | ||||
| Total debt securities | $ | 12.1 | $ | 11.8 | ||||
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. The framework defines fair value, provides guidance for measuring fair value and requires certain disclosures. The framework discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The
framework utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
•Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
•Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
Our population of assets and liabilities subject to fair value measurements as of December 31, 2025 were as follows:
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Debt securities | 11.8 | — | — | 11.8 | |||||||||||||||||||
| Foreign currency forward contracts | 0.3 | — | 0.3 | — | |||||||||||||||||||
| Cross-currency swaps | 2.4 | — | 2.4 | — | |||||||||||||||||||
| Interest rate swaps | — | — | — | — | |||||||||||||||||||
| Total assets | 14.5 | — | 2.7 | 11.8 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | 0.1 | — | 0.1 | — | |||||||||||||||||||
| Cross-currency swaps | 17.8 | — | 17.8 | — | |||||||||||||||||||
| Interest rate swaps | 0.4 | — | 0.4 | — | |||||||||||||||||||
| Total liabilities | $ | 18.3 | $ | — | $ | 18.3 | $ | — | |||||||||||||||
Our population of assets and liabilities subject to fair value measurements as of December 31, 2024 were as follows:
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| 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 | — | |||||||||||||||||||
| Interest rate swaps | 0.1 | — | 0.1 | — | |||||||||||||||||||
| Total assets | 36.6 | — | 4.3 | 32.3 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Foreign currency forward contracts | — | — | — | — | |||||||||||||||||||
| Cross-currency swaps | — | — | — | — | |||||||||||||||||||
| Interest rate swaps | 0.2 | — | 0.2 | — | |||||||||||||||||||
| Total liabilities | $ | 0.2 | — | $ | 0.2 | $ | — | ||||||||||||||||
Our foreign currency forward exchange contracts, cross-currency swaps and interest rate swaps are valued using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present value amount. 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 2025 or 2024.
The fair value and carrying value of total debt, including current portion, was $281.4 million and $273.6 million, respectively, as of December 31, 2025. 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.Free Sentinel
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.