10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

[ü]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012
OR
[]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________.

Commission File Number001-16191

TENNANT COMPANY

(Exact name of registrant as specified in its charter)

Minnesota	41-0572550
State or other jurisdiction of	(I.R.S. Employer
incorporation or organization	Identification No.)

701 North Lilac Drive, P.O. Box 1452

Minneapolis, Minnesota 55440

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code 763-540-1200

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of exchange on which registered
Common Stock, par value $0.375 per share	New York Stock Exchange
Preferred Share Purchase Rights	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.	ü	Yes		No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.		Yes	ü	No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	ü	Yes		No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	ü	Yes		No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.                                                             [ü]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer	ü		Accelerated filer
Non-accelerated filer		(Do not check if a smaller reporting company)	Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).	Yes	ü	No
The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2012, was $732,202,104.
As of January 31, 2013, there were 18,478,417 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for its 2013 annual meeting of shareholders (the “2013 Proxy Statement”) are incorporated by reference in Part III.

Tennant Company

Form 10–K

Table of Contents

PART I					Page
	Item 1	Business			3
	Item 1A	Risk Factors			4
	Item 1B	Unresolved Staff Comments			5
	Item 2	Properties			5
	Item 3	Legal Proceedings			5
	Item 4	Mine Safety Disclosures			5
PART II
	Item 5	Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities			6
	Item 6	Selected Financial Data			8
	Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations			9
	Item 7A	Quantitative and Qualitative Disclosures About Market Risk			16
	Item 8	Financial Statements and Supplementary Data			17
			Report of Independent Registered Public Accounting Firm		17
			Consolidated Financial Statements		18
			Consolidated Statements of Earnings		18
			Consolidated Statements of Comprehensive Income		18
			Consolidated Balance Sheets		19
			Consolidated Statements of Cash Flows		20
			Consolidated Statements of Shareholders' Equity		21
			Notes to the Consolidated Financial Statements		22
			1	Summary of Significant Accounting Policies	22
			2	Newly Adopted Accounting Pronouncements	24
			3	Management Actions	24
			4	Acquisitions and Divestitures	25
			5	Inventories	26
			6	Property, Plant and Equipment	27
			7	Goodwill and Intangible Assets	27
			8	Debt	28
			9	Other Current Liabilities	30
			10	Fair Value Measurements	31
			11	Retirement Benefit Plans	31
			12	Shareholders' Equity	36
			13	Commitments and Contingencies	36
			14	Income Taxes	37
			15	Share-Based Compensation	39
			16	Earnings Per Share	41
			17	Segment Reporting	41
			18	Consolidated Quarterly Data (Unaudited)	42
			19	Related Party Transactions	42
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			43
	Item 9A	Controls and Procedures			43
	Item 9B	Other Information			43
PART III
	Item 10	Directors, Executive Officers and Corporate Governance			43
	Item 11	Executive Compensation			44
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters			44
	Item 13	Certain Relationships and Related Transactions, and Director Independence			44
	Item 14	Principal Accountant Fees and Services			44
PART IV
	Item 15	Exhibits and Financial Statement Schedules			45

2

TENNANT COMPANY

2012

ANNUAL REPORT

Form 10–K

(Pursuant to Securities Exchange Act of 1934)

PART I

ITEM 1 – Business

General Development of Business

Tennant Company, a Minnesota corporation that was incorporated in 1909, is a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. The Company’s floor maintenance and outdoor cleaning equipment, chemical-free and other sustainable cleaning technologies, coatings and related products are used to clean and coat surfaces in factories, office buildings, parking lots and streets, airports, hospitals, schools, warehouses, shopping centers and other retail environments, and more. Customers include building service contract cleaners to whom organizations outsource facilities maintenance, as well as end-user businesses, healthcare facilities, schools and local, state and federal governments who handle facilities maintenance themselves. 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.

Segment and Geographic Area Financial Information

The Company has one reportable business segment. Sales to customers geographically located in the United States were $406.2 million, $392.5 million and $354.5 million for the years ended December 31, 2012, 2011 and 2010, respectively. Additional financial information on the Company’s segment and geographic areas is provided in Note 17 of the Consolidated Financial Statements.

Principal Products, Markets and Distribution

The Company offers products and solutions mainly consisting of mechanized cleaning equipment targeted at commercial and industrial markets; parts, consumables and service maintenance and repair; business solutions such as pay-for-use offerings, rental and leasing programs; and water-based cleaning technologies that reduce the need for chemicals in the cleaning process. Adjacent products include surface coatings and floor preservation products. Tennant Company’s suite of offerings are marketed and sold under a variety of brands, including Tennant®, Nobles®, Green Machines™, Alfa™ and Orbio®. The Orbio brand of products and solutions is developed and managed by Orbio Technologies, a group created by Tennant to focus on expanding the opportunities for water-based sustainable technologies such as ec-H2O™ technology and Orbio 5000-Sc. Tennant Company’s products are sold through direct and distribution channels in various regions around the world. In North America, Brazil, Australia, China and most of Western Europe products are sold through a direct sales organization and independent distributors. In more than 80 other countries, Tennant relies on a broad network of independent distributors.

Raw Materials

The Company has not experienced any significant or unusual problems in the availability of raw materials or other product components. The Company has sole-source vendors for certain components. A disruption in supply from such vendors may disrupt the Company’s operations. However, the Company believes that it can find alternate sources in the event there is a disruption in supply from such vendors.

Intellectual Property

Although the Company considers that its patents, proprietary technologies, customer relationships, licenses, trademarks, trade names and brand names in the aggregate constitute a valuable asset, it does not regard its business as being materially dependent upon any single intellectual property.

Seasonality

Although the Company’s business is not seasonal in the traditional sense, historically revenues and earnings have been more concentrated in the fourth quarter of each year reflecting the tendency of customers to increase capital spending during such quarter and the Company’s efforts to close those orders which then reduces order backlogs. In addition, the Company offers annual distributor rebates and sales commissions which tend to drive sales in the fourth quarter. In 2012, the highest sales quarter was the second quarter due primarily to very strong sales of industrial rider scrubbers, most equipped with ec-H2O technology, and the lithium-ion battery powered Green Machines 500ze city cleaning sweepers.

Working Capital

The Company funds operations through a combination of cash and cash equivalents and cash flows from operations. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to subsidiaries as needed. In addition, credit facilities are available for additional working capital needs or investment opportunities.

Major Customers

The Company sells its products to a wide variety of customers, none of which is of material importance in relation to the business as a whole. The customer base includes several governmental entities which generally have terms similar to other customers.

Competition

While there is no publicly available industry data concerning market share, the Company believes, through its own market research, that it is a world-leading manufacturer of floor maintenance and cleaning equipment. Significant competitors exist in all key geographic regions. However, the key competitors vary by region. The Company competes primarily on the basis of offering a broad line of high-quality, innovative products supported by an extensive sales and service network in major markets.

The Company’s competitors initiated legal and/or regulatory challenges in 2010 and 2011 in multiple jurisdictions challenging Tennant’s advertising claims pertaining to its ec-H2O water-based technology. Many of these claims have been closed with no adverse impact to Tennant. The Company does not currently view the outstanding proceedings as material and does not expect the outcome to have a material adverse effect on the Company's operating results, financial condition or cash flows.

3

Research and Development

The Company strives to be an industry leader in innovation and is committed to investing in research and development. The Company’s Global Innovation Center in Minnesota and engineers throughout the global locations are dedicated to various activities including researching new technologies to create meaningful product differentiation, development of new products, improvements of existing product design or manufacturing processes and exploring new product applications with customers. In 2012, 2011 and 2010, the Company spent $29.3 million, $27.9 million and $26.0 million on research and development, respectively.

Environmental Compliance

Compliance with Federal, State and local provisions which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had, and the Company does not expect it to have, a material effect upon the Company’s capital expenditures, earnings or competitive position.

Employees

The Company employed 2,816 people in worldwide operations as of December 31, 2012.

Available Information

The Company makes available free of charge, through the Company’s website at www.tennantco.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable when such material is filed electronically with, or furnished to, the Securities and Exchange Commission (“SEC”).

ITEM 1A – Risk Factors

The following are significant factors known to us that could materially adversely affect our business, financial condition or operating results.

We may encounter financial difficulties if the United States or other global economies experience a significant long-term economic downturn, decreasing the demand for our products.

Our product sales are sensitive to declines in capital spending by our customers.  Decreased demand for our products could result in decreased revenues, profitability and cash flows and may impair our ability to maintain our operations and fund our obligations to others.  In the event of a continued significant long-term economic downturn in the U.S. or other global economies, our revenues could decline to the point that we may have to take cost-saving measures to reduce our fixed costs to a level that is in line with a lower level of sales in order to stay in business long-term in a depressed economic environment.

We are subject to competitive risks associated with developing innovative products and technologies, including but not limited to, the risk that customers do not continue to pay for innovation and the risk of competitive challenges to our products and technology and the underlying intellectual property.

Our products are sold in competitive markets throughout the world. Competition is based on product features and design, brand recognition, reliability, durability, technology, breadth of product offerings, price, customer relationships and after-sale service. Although we believe that the performance and price characteristics of our products will produce competitive solutions for our customers’ needs, because of our dedication to innovation and continued investments in research and development, our products generally cost more than our competitors’ products. We believe that customers will pay for the innovations and quality in our products; however, in the current economic environment, it may be difficult for us to compete with lower cost products offered by our competitors and there can be no assurance that our customers will continue to choose our products over products offered by our competitors. If our products, markets and services are not competitive, we may experience a decline in sales, pricing and market share, which adversely impacts revenues, margin and the success of our operations.

In addition, we may be vulnerable to competitors who attempt to challenge our technology and our products or diminish the reputation of our brand, all of which could adversely affect our business. Our competition has previously initiated legal and regulatory actions against us and while we do not view these challenges to be material, defense of such claims may require substantial commitment of time and money and could potentially influence new customers from readily accepting products with our ec-H2O technology, which could adversely affect our business.

Competitors may also initiate litigation to challenge the validity of our patents or claims, allege that we infringe upon their patents, or they may use their resources to design comparable products that do not infringe upon our patents. Regardless of whether such litigation is successful, the litigation could significantly increase our costs and divert management’s attention from the operation of our business, which could adversely affect our results of operations and financial condition.

We may not be able to effectively manage organizational changes which could negatively impact our operating results or financial condition.

We are continuing to implement global standardized processes in our business and asking our workforce to perform at a high level despite reduced staffing levels as a result of our prior workforce reduction and restructuring actions. This consolidation and reallocation of resources is part of our ongoing efforts to optimize our cost structure in the current economy. Our operating results may be negatively impacted if we are unable to manage these organizational changes by failing to assimilate the work of the positions that are eliminated or redeployed as part of our actions to reduce headcount and restructure positions. In addition, if we do not effectively manage the transition of these positions, we may not fully realize the anticipated savings of these actions or they may negatively impact our ability to serve our customers or meet our strategic objectives.

We are subject to many laws and regulations and any non-compliance could negatively impact our financial condition or business operations.

Our policies and procedures are designed to comply with applicable laws and regulations in all countries in which we operate and conduct business. U.S. as well as foreign government regulations continue to become increasingly stringent and are impacting more areas of our business operations each year. Failure to comply with present or future laws, rules and regulations of any kind that govern our business could result in suspension of all or a portion of our operations or the imposition of significant regulatory, administrative, civil or criminal penalties or sanctions.

4

Our ability to effectively operate our Company could be adversely affected if we are unable to attract and retain key personnel and other highly skilled employees.

Our continued success will depend on, among other things, the skills and services of our executive officers and other key personnel. Our ability to attract and retain other highly qualified managerial, technical, manufacturing, research, sales and marketing personnel also impacts our ability to effectively operate our business. As the economy recovers and companies grow and increase their hiring activities, there is an inherent risk of increased employee turnover and the loss of valuable employees in key positions, especially in emerging markets throughout the world. We believe the increased loss of key personnel within a concentrated region could adversely affect our sales growth.

Inadequate funding of new technologies may result in an inability to develop new innovative products and services.

We strive to develop new and innovative products and services to differentiate ourselves in the marketplace. New product development relies heavily on our financial and resource investments in both the short term and long term. If we fail to adequately fund product development projects we risk not meeting our customer expectations, which could result in decreased revenues, declines in margin and loss of market share.

We are subject to product liability claims and product quality issues that could adversely affect our operating results or financial condition.

Our business exposes us to potential product liability risks that are inherent in the design, manufacturing and distribution of our products. If products are used incorrectly by our customers, injury may result leading to product liability claims against us. Some of our products or product improvements may have defects or risks that we have not yet identified that may give rise to product quality issues, liability and warranty claims. If product liability claims are brought against us for damages that are in excess of our insurance coverage or for uninsured liabilities and it is determined we are liable, our business could be adversely impacted. Any losses we suffer from any liability claims, and the effect that any product liability litigation may have upon the reputation and marketability of our products, may have a negative impact on our business and operating results. We could experience a material design or manufacturing failure in our products, a quality system failure, other safety issues, or heightened regulatory scrutiny that could warrant a recall of some of our products. Any unforeseen product quality problems could result in loss of market share, reduced sales, and higher warranty expense.

We may encounter difficulties as we upgrade and evolve the capabilities of our computer systems, which could adversely impact our abilities to accomplish anticipated future cost savings and better serve our customers.

We have many information technology systems that are important to the operation of our business. Significantly upgrading and evolving the capabilities of our existing systems could lead to inefficient or ineffective use of our technology due to lack of training or expertise in these evolving technology systems. These factors could lead to significant expenses, adversely impacting our results of operations and hinder our ability to offer better technology solutions to our customers.

We may encounter difficulties as we invest in changes to our processes and computer systems that are foundational to our ability to maintain and manage the data in our systems.

We rely on our computer systems to effectively manage our business, serve our customers and report financial data. Our current systems are adequate for our current business operations; however, we are in the process of standardizing our processes and the way we utilize our computer systems with the objective that we will improve our ability to effectively maintain and manage our systems data so that as our business grows, our processes will be able to more efficiently handle this growth. There are inherent risks in changing processes and systems data and if we are not successful in our attempts to improve our data and system processes, we may experience higher costs or an interruption in our business which could adversely impact our ability to serve our customers and our operating results.

We may be unable to conduct business if we experience a significant business interruption in our computer systems, manufacturing plants or distribution facilities for a significant period of time.

We rely on our computer systems, manufacturing plants and distribution facilities to efficiently operate our business. If we experience an interruption in the functionality in any of these items for a significant period of time, we may not have adequate business continuity planning contingencies in place to allow us to continue our normal business operations on a long-term basis. Significant long-term interruption in our business could cause a decline in sales, an increase in expenses and could adversely impact our operating results.

ITEM 1B – Unresolved Staff Comments

None.

ITEM 2 – Properties

The Company’s corporate offices are owned by the Company and are located in the Minneapolis, Minnesota, metropolitan area. Manufacturing facilities are located in Minneapolis, Minnesota; Holland, Michigan; Louisville, Kentucky; Uden, The Netherlands; Falkirk, United Kingdom; São Paulo, Brazil; and Shanghai, China. Sales offices, warehouse and storage facilities are leased in various locations in North America, Europe, Japan, China, Asia, Australia, New Zealand and Latin America. The Company’s facilities are in good operating condition, suitable for their respective uses and adequate for current needs. Further information regarding the Company’s property and lease commitments is included in the Contractual Obligations section of Item 7 and in Note 13 of the Consolidated Financial Statements.

ITEM 3 – Legal Proceedings

There are no material pending legal proceedings other than ordinary routine litigation incidental to the Company’s business.

ITEM 4 – Mine Safety Disclosures

Not applicable.

5

PART II

ITEM 5 – Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

MARKET INFORMATION – Tennant common stock is traded on the New York Stock Exchange, under the ticker symbol TNC. As of January 31, 2013, there were 445 shareholders of record. The common stock price was $46.04 per share on January 31, 2013.The accompanying chart shows the high and low sales prices for the Company’s shares for each full quarterly period over the past two years as reported by the New York Stock Exchange:

	2012				2011
	High		Low		High		Low
First	$	44.00	$	37.75	$	43.24	$	35.66
Second	48.45		37.82		42.82		33.51
Third	44.25		36.16		44.25		34.36
Fourth	43.95		35.30		41.98		32.92

DIVIDEND INFORMATION – Cash dividends on Tennant’s common stock have been paid for 68 consecutive years. Tennant’s annual cash dividend payout increased for the 41^st consecutive year to $0.69 per share in 2012, an increase of $0.01 per share over 2011. Dividends are generally declared each quarter. On February 13, 2013, the Company announced a quarterly cash dividend of $0.18 per share payable March 15, 2013, to shareholders of record on February 28, 2013.

DIVIDEND REINVESTMENT OR DIRECT DEPOSIT OPTIONS – Shareholders have the option of reinvesting quarterly dividends in additional shares of Company stock or having dividends deposited directly to a bank account. The Transfer Agent should be contacted for additional information.

TRANSFER AGENT AND REGISTRAR – Shareholders with a change of address or questions about their account may contact:

Wells Fargo Bank, N.A.

Shareowner Services

P.O. Box 64874

St. Paul, MN 55164-0854

(800) 468-9716

EQUITY COMPENSATION PLAN INFORMATION – Information regarding equity compensation plans required by Regulation S-K Item 201(d) is incorporated by reference in Item 12 of this annual report on Form 10-K from the 2013 Proxy Statement.

SHARE REPURCHASES – On April 25, 2012, the Board of Directors authorized the repurchase of 1,000,000 shares of our common stock. This was in addition to the 618,050 shares remaining under our current repurchase program at that time. Share repurchases are made from time to time in the open market or through privately negotiated transactions, primarily to offset the dilutive effect of shares issued through our stock-based compensation programs. Our 2011 Credit Agreement and Shelf Agreement restrict the payment of dividends or repurchasing of stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50.0 million to $75.0 million during any fiscal year.

For the Quarter Ended December 31, 2012	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1–31, 2012	246	$	37.35	—	1,282,073
November 1–30, 2012	177,763	36.83		177,674	1,104,399
December 1–31, 2012	13,603	39.85		6,169	1,098,230
Total	191,612	$	37.04	183,843	1,098,230

(1) Includes 7,769 shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by employees who exercised stock options or restricted stock under employee stock compensation plans.

6

STOCK PERFORMANCE GRAPH – The following graph compares the cumulative total shareholder return on Tennant’s common stock to two indices: S&P SmallCap 600 and Morningstar Industrials Sector. The graph below compares the performance for the last five fiscal years, assuming an investment of $100 on December 31, 2007, including the reinvestment of all dividends.

5-YEAR CUMULATIVE TOTAL RETURN COMPARISON

	2007	2008	2009	2010	2011	2012
Tennant Company	$100	$35	$62	$93	$95	$110
S&P SmallCap 600	$100	$69	$87	$109	$110	$128
Morningstar Industrials Sector	$100	$61	$75	$93	$93	$107

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ITEM 6 – Selected Financial Data

(In thousands, except shares and per share data)

Years Ended December 31	2012				2011				2010				2009				2008
Financial Results:
Net Sales	$	738,980			$	753,998			$	667,667			$	595,875			$	701,405
Cost of Sales	413,684				434,817			(2)	383,341			(3)	349,767				415,155
Gross Margin - %	44.0				42.3				42.6				41.3				40.8
Research and Development Expense	29,263				27,911				25,957				22,978				24,296
% of Net Sales	4.0				3.7				3.9				3.9				3.5
Selling and Administrative Expense	234,114			(1)	241,625			(3)	221,235			(3)	245,623			(4)	243,385			(5)
% of Net Sales	31.7				32.0				33.1				41.2				34.7
Gain on Sale of Business	(784		)	(1)	—				—				—				—
% of Net Sales	(0.1		)		—				—				—				—
Profit (Loss) from Operations	62,703			(1)	49,645			(2)	37,134			(3)	(22,493		)	(4)	18,569			(5)
% of Net Sales	8.5				6.6				5.6				(3.8		)		2.6
Total Other (Expense), Net	(2,813		)		(915		)		(2,407		)		(1,827		)		(994		)
Profit (Loss) Before Income Taxes	59,890			(1)	48,730			(2)	34,727			(3)	(24,320		)	(4)	17,575			(5)
% of Net Sales	8.1				6.5				5.2				(4.1		)		2.5
Income Tax Expense (Benefit)	18,306			(1)	16,017			(2)	(76		)	(3)	1,921			(4)	6,951			(5)
Effective Tax Rate - %	30.6				32.9				(0.2		)		7.9				39.6
Net Earnings (Loss)	41,584			(1)	32,713			(2)	34,803			(3)	(26,241		)	(4)	10,624			(5)
% of Net Sales	5.6				4.3				5.2				(4.4		)		1.5
Per Share Data:
Basic Net Earnings (Loss)	$	2.24		(1)	$	1.74		(2)	$	1.85		(3)	$	(1.42	)	(4)	$	0.58		(5)
Diluted Net Earnings (Loss)	$	2.18		(1)	$	1.69		(2)	$	1.80		(3)	$	(1.42	)	(4)	$	0.57		(5)
Diluted Weighted Average Shares	19,102,016				19,360,428				19,332,103				18,507,772				18,581,840
Cash Dividends	$	0.69			$	0.68			$	0.59			$	0.53			$	0.52
Financial Position:
Total Assets	$	420,760			$	424,262			$	403,668			$	377,726			$	456,604
Total Debt	32,323				36,455				30,828				34,211				95,339
Total Shareholders’ Equity	235,054				220,852				216,133				184,279				209,904
Current Ratio	2.2				2.2				2.1				1.9				2.3
Debt-to-Capital Ratio	12.1		%		14.2		%		12.5		%		15.7		%		31.2		%
Cash Flows:
Net Cash Provided by Operations	$	47,566			$	56,909			$	42,530			$	75,185			$	37,394
Capital Expenditures, Net of Disposals	(14,595		)		(13,301		)		(9,934		)		(11,172		)		(19,982		)
Free Cash Flow	32,971				43,608				32,596				64,013				17,412
Other Data:
Depreciation and Amortization	$	20,872			$	21,418			$	21,192			$	22,803			$	22,959
Number of employees at year-end	2,816				2,865				2,793				2,786				3,002

The results of operations from our 2011, 2009 and 2008 acquisitions have been included in the Consolidated Financial Statements, as well as the Selected Financial Data presented above, since each of their respective dates of acquisition.

(1) 2012 includes a gain on sale of business of $784 pre-tax ($508 after-tax or $0.03 per diluted share), a restructuring charge of $760 pre-tax ($670 after-tax or $0.04 per diluted share) and tax benefits from an international entity restructuring of $2,043 (or $0.11 per diluted share).

(2) 2011 includes a Product Line Obsolescence charge of $4,300 pre-tax ($3,811 after-tax or $0.20 per diluted share) and an international executive severance charge of $1,217 (or $0.06 per diluted share).

(3) 2010 includes a tax benefit from the international entity restructuring of $10,913 (or $0.56 per diluted share), a workforce redeployment charge of $1,671 pre-tax ($1,196 after-tax or $0.06 per diluted share), inventory revaluation from change in functional currency designation due to international entity restructuring of $647 pre-tax ($453 after-tax or $0.02 per diluted share) and a revision of our 2008 workforce reduction reserve of $277 pre-tax ($173 after-tax or $0.01 per diluted share).

8

(4) 2009 includes a goodwill impairment charge of $43,363 pre-tax ($42,289 after-tax or $2.29 per diluted share), a benefit from a revision during the first quarter of 2009 to the 2008 workforce reduction charge of $1,328 pre-tax ($1,249 after-tax or $0.07 per diluted share) and a net tax benefit, primarily from a United Kingdom business reorganization, of $1,864 after-tax (or $0.10 per diluted share).

(5) 2008 includes a workforce reduction charge and associated expenses of $14,551 pre-tax ($12,003 after-tax or $0.65 per diluted share), increase in Allowance for Doubtful Accounts of $3,361 pre-tax ($3,038 after-tax or $0.16 per diluted share), write-off of technology investments of $1,842 pre-tax ($1,246 after-tax or $0.07 per diluted share) and a gain on sale of Centurion assets of $229 pre-tax ($143 after-tax or $0.01 per diluted share).

ITEM 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Tennant Company is a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. Our products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; chemical-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading floors and other surfaces. We sell our products through our direct sales and service organization and a network of authorized distributors worldwide. Geographically, our customers are located in North America, Latin America, Europe, the Middle East, Africa and Asia Pacific. We strive to be an innovator in our industry through our commitment to understanding our customers’ needs and using our expertise to create innovative products and solutions.

Net Earnings for 2012 were $8.9 million greater than 2011 despite a Net Sales decline of 2.0%. 2012 Gross Profit margin increased 170 basis points to 44.0 percent from 42.3 percent in 2011 due to favorable product mix, stable commodity costs and production efficiencies. Net Sales in 2012 totaled $739.0 million, which was down from $754.0 million in the prior year primarily due to lower sales unit volume in Europe stemming from weak economic conditions. 2012 organic sales growth, excluding the impact of foreign currency exchange, was essentially flat with growth in the Americas and emerging markets being offset by declines in the mature international markets. Selling and Administrative Expense (“S&A Expense”) decreased 3.1 percent, or 30 basis points, from $241.6 million in 2011 to $234.1 million in 2012 due to continued tight cost controls and improved operating leverage. Operating Profit increased 26 percent and Operating Profit margin improved 190 basis points to 8.5 percent in 2012 from 6.6 percent in 2011 due to higher Gross Profits and improved operating leverage. Net Earnings for 2012 were also favorably impacted by a $2.0 million tax benefit from an international entity restructuring.

Tennant continues to invest in innovative product development with 4.0% of 2012 Net Sales spent on Research and Development. During 2012 there were increased investments in electrically-activated water technology platforms to further expand our chemical-free and other sustainable cleaning technologies offerings as well as investments in our core business including the work to redesign our large equipment portfolio.

We ended 2012 with a Debt-to-Capital ratio of 12.1%, $53.9 million in Cash and Cash Equivalents compared to $52.3 million at the end of 2011, and Shareholders’ Equity of $235.1 million. During 2012, we generated operating cash flows of $47.6 million. Total debt was $32.3 million as of December 31, 2012 compared to $36.5 million at the end of 2011.

Historical Results

The following table compares the historical results of operations for the years ended December 31, 2012, 2011 and 2010 in dollars and as a percentage of Net Sales (in thousands, except per share amounts and percentages):

	2012			%		2011			%		2010			%
Net Sales	$	738,980		100.0		$	753,998		100.0		$	667,667		100.0
Cost of Sales	413,684			56.0		434,817			57.7		383,341			57.4
Gross Profit	325,296			44.0		319,181			42.3		284,326			42.6
Operating Expense:
Research and Development Expense	29,263			4.0		27,911			3.7		25,957			3.9
Selling and Administrative Expense	234,114			31.7		241,625			32.0		221,235			33.1
Gain on Sale of Business	(784		)	(0.1	)	—			—		—			—
Total Operating Expenses	262,593			35.5		269,536			35.7		247,192			37.0
Profit from Operations	62,703			8.5		49,645			6.6		37,134			5.6
Other Income (Expense):
Interest Income	1,069			0.1		752			0.1		133			—
Interest Expense	(2,517		)	(0.3	)	(2,238		)	(0.3	)	(1,619		)	(0.2	)
Net Foreign Currency Transaction (Losses) Gains	(1,403		)	(0.2	)	559			0.1		(902		)	(0.1	)
Other Income (Expense), Net	38			—		12			—		(19		)	—
Total Other (Expense), Net	(2,813		)	(0.4	)	(915		)	(0.1	)	(2,407		)	(0.4	)
Profit Before Income Taxes	59,890			8.1		48,730			6.5		34,727			5.2
Income Tax Expense (Benefit)	18,306			2.5		16,017			2.1		(76		)	—
Net Earnings	$	41,584		5.6		$	32,713		4.3		$	34,803		5.2
Net Earnings per Diluted Share	$	2.18				$	1.69				$	1.80

Consolidated Financial Results

Net Earnings for 2012 were $41.6 million, or $2.18 per diluted share, compared to $32.7 million, or $1.69 per diluted share for 2011. Net Earnings were impacted by:

• A decrease in Net Sales of 2.0%, primarily due to lower sales unit volume in Europe stemming from weak economic conditions.

• A 170 basis point increase in Gross Profit margin due to favorable product mix, stable commodity costs and production efficiencies.

• A decrease in S&A Expense as a percentage of Net Sales of 30 basis points due to continued tight cost controls and improved operating efficiencies.

• A tax benefit from an international entity restructuring contributed $0.11 per diluted share.

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Net Earnings for 2011 were $32.7 million, or $1.69 per diluted share, compared to $34.8 million, or $1.80 per diluted share for 2010. Net Earnings were impacted by:

• An increase in Net Sales of 12.9%, primarily driven by equipment unit volume increases.

• A decrease in S&A Expense as a percentage of Net Sales of 110 basis points due to continued tight cost controls and improved operating efficiencies.

Net Sales

In 2012, consolidated Net Sales were $739.0 million, a decrease of 2.0% as compared to 2011. Consolidated Net Sales were $754.0 million in 2011, an increase of 12.9% as compared to 2010.

The components of the consolidated Net Sales change for 2012 as compared to 2011, and 2011 as compared to 2010, were as follows:

Growth Elements	2012 v. 2011	2011 v. 2010
Organic Growth:
Volume	(1.0%)	8.9%
Price	1.0%	1.5%
Organic Growth	0%	10.4%
Foreign Currency	(2.0%)	2.5%
Total	(2.0%)	12.9%

The 2.0% decrease in consolidated Net Sales for 2012 as compared to 2011 was primarily due to the impact of an unfavorable foreign currency exchange.

The 12.9% increase in consolidated Net Sales for 2011 as compared to 2010 was primarily driven by an increase in equipment unit sales volume.

The following table sets forth annual Net Sales by operating segment and the related percent change from the prior year (in thousands, except percentages):

	2012		%		2011		%	2010		%
Americas	$	491,661	2.1		$	481,426	13.4	$	424,462	16.0
Europe, Middle East and Africa	166,208		(11.8	)	188,338		9.1	172,619		(2.9	)
Asia Pacific	81,111		(3.7	)	84,234		19.3	70,586		35.7
Total	$	738,980	(2.0	)	$	753,998	12.9	$	667,667	12.0

Americas – In 2012, Americas Net Sales increased 2.1% to $491.7 million as compared with $481.4 million in 2011. The primary driver of the increase in Net Sales was attributable to sales unit volume increases with higher sales to strategic accounts, continued growth of scrubbers equipped with our ec-H2O technology and double-digit growth in Latin America. Unfavorable direct foreign currency translation exchange effects decreased Net Sales by approximately 1.0%.

In 2011, Americas Net Sales increased 13.4% to $481.4 million as compared with $424.5 million in 2010. The primary driver of the increase in Net Sales was attributable to sales unit volume increases with continued growth of scrubbers equipped with our ec-H2O technology in North America and growth of industrial equipment in Latin America. Favorable direct foreign currency translation exchange effects increased Net Sales by approximately 0.5%.

Europe, Middle East and Africa – Europe, Middle East and Africa (“EMEA”) Net Sales in 2012 decreased 11.8% to $166.2 million as compared to 2011 Net Sales of $188.3 million. An organic sales decrease of approximately 6.3% was primarily due to sales unit volume decreases, particularly industrial equipment, due to continued economic uncertainty. Unfavorable direct foreign currency exchange effects decreased EMEA Net Sales by approximately 5.5% in 2012.

EMEA Net Sales in 2011 increased 9.1% to $188.3 million as compared to 2010 Net Sales of $172.6 million. Favorable direct foreign currency exchange effects increased EMEA Net Sales by approximately 4.5% in 2011. An organic sales increase of approximately 4.6% was primarily due to growth of indoor equipment, in particular increased sales of scrubbers equipped with our ec-H2O technology, which was somewhat offset by lower sales of outdoor equipment.

Asia Pacific – Asia Pacific Net Sales in 2012 decreased 3.7% to $81.1 million over 2011 Net Sales of $84.2 million. An organic sales decrease of approximately 4.2% was primarily due to sales unit volume decreases in mature markets, particularly Australia, somewhat offset by growth in China. Favorable direct foreign currency exchange effects increased Net Sales by approximately 0.5% in 2012.

Asia Pacific Net Sales in 2011 increased 19.3% to $84.2 million over 2010 Net Sales of $70.6 million. An organic sales increase of approximately 10.3% was primarily due to strong growth of industrial scrubbers, especially in China, which was somewhat offset by selling price decreases in some mature markets related to movements in foreign exchange rates. Favorable direct foreign currency exchange effects increased Net Sales by approximately 9.0% in 2011.

Gross Profit

Gross Profit margin was 44.0% in 2012, an increase of 170 basis points as compared to 2011. Gross Profit margin in 2012 was favorably impacted by favorable product mix, stable commodity costs and production efficiencies.

Gross Profit margin was 42.3% in 2011, a decrease of 30 basis points as compared to 2010. Gross Profit margin in 2011 was adversely impacted by 30 basis points due to an unfavorable net adjustment to LIFO inventory resulting from an increase in inventories and higher cost indices. Raw material cost inflation in 2011 was mitigated by selling price increases, productivity improvements, tight cost controls and leverage from higher production levels.

Operating Expenses

Research and Development Expense – Research and Development Expense (“R&D Expense”) increased $1.4 million, or 4.8%, in 2012 as compared to 2011. As a percentage of Net Sales, 2012 R&D Expense increased 30 basis points to 4.0% in 2012 from 3.7% in the prior year. R&DExpense increased in 2012 as we made additional investments in our chemical-free and other sustainable cleaning technologies as well as our core business including the work to redesign our large equipment portfolio.

R&D Expense increased $2.0 million, or 7.5%, in 2011 as compared to 2010. As a percentage of Net Sales, 2011 R&D Expense decreased 20 basis points to 3.7% in 2011 from 3.9% in the prior year. R&D Expense increased in 2011 as we made additional investments in our chemical-free and other sustainable cleaning technologies as well as our core business.

Selling and Administrative Expense – Selling and Administrative Expense (“S&A Expense”) decreased by $7.5 million, or 3.1%, in 2012 compared to 2011. As a percentage of Net Sales, 2012 S&A Expense decreased 30 basis points to 31.7% due to continued tight cost controls and improved operating efficiencies.

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S&A Expense increased by $20.4 million, or 9.2%, in 2011 compared to 2010 due to higher variable costs related to the increased sales volume, $4.0 million related to the Hofmans product obsolescence and international executive severance, and investments in our sustainable cleaning business. As a percentage of Net Sales, 2011 S&A Expense decreased 110 basis points to 32.0% due to continued tight cost controls and improved operating efficiencies.

Total Other Income (Expense), Net

Interest Income – Interest Income was $1.1 million in 2012, an increase of $0.3 million from 2011. The increase between 2012 and 2011 is due to an increase in cash invested.

Interest Income was $0.8 million in 2011, an increase of $0.6 million from 2010. The increase between 2011 and 2010 is due to higher interest rates on higher cash investments.

Interest Expense – Interest Expense was $2.5 million in 2012 as compared to $2.2 million in 2011. This increase is primarily due to a higher interest rate related to long-term fixed rate borrowings initiated in 2011.

Interest Expense was $2.2 million in 2011 as compared to $1.6 million in 2010. This increase is primarily due to a higher level of debt with a higher interest rate related to long-term fixed rate borrowings initiated in 2011.

Net Foreign Currency Transaction (Losses) Gains – Net Foreign Currency Transaction Losses were $1.4 million in 2012 as compared to Gains of $0.6 million in 2011. The unfavorable decrease from the prior year was due to fluctuations in foreign currency rates in the normal course of business.

Net Foreign Currency Transaction Gains were $0.6 million in 2011 as compared to Losses of $0.9 million in 2010. The favorable increase from the prior year was due to fluctuations in foreign currency rates in the normal course of business.

Other Income (Expense), Net – There was no significant change in Other Income (Expense), Net in 2012 as compared to 2011 or in 2011 as compared to 2010.

Income Taxes

The overall effective income tax rate was 30.6%, 32.9% and (0.2%) in 2012, 2011 and 2010 respectively. The tax expense for 2012 includes a $2.0 million tax benefit in the fourth quarter associated with an international entity restructuring which materially decreased the overall effective tax rate. Excluding these tax benefits, the overall effective tax rate would have been 34.0%. The increase in the 2012 overall effective tax rate as compared to the prior year, excluding the effect of these one-time charges, was primarily related to the mix in our full year taxable earnings by country and to the expiration of the Federal R&D tax credit on December 31, 2011.

On January 2, 2013, the American Taxpayer Relief Act of 2012 (H.R. 8) was signed into law which retroactively extends the Federal R&D tax credit from January 1, 2012 through December 31, 2013. As a result, we will recognize the retroactive benefit of the 2012 Federal R&D credit of approximately $0.8 million as a discrete item in the first quarter of 2013, the period in which the legislation, including the reinstatement, was enacted.

The 2011 net tax expense included only a $0.5 million tax benefit in the second quarter associated with the $5.5 million pre-tax charges related to Hofmans product obsolescence and international executive severance, materially impacting the overall effective rate. Excluding these charges, the 2011 overall rate would have been 30.4%.

The 2010 net tax benefit included a $10.9 million tax benefit associated with a restructuring and realignment of international operations recorded in the fourth quarter, materially impacting the overall effective rate. Excluding the tax benefit associated with the fourth quarter restructuring and realignment of international operations, the 2010 overall rate would have been 31.3%.

Liquidity and Capital Resources

Liquidity – Cash and Cash Equivalents totaled $53.9 million at December 31, 2012, as compared to $52.3 million of Cash and Cash Equivalents as of December 31, 2011. Cash and Cash Equivalents held by our foreign subsidiaries totaled $10.6 million as of December 31, 2012 as compared to $11.3 million of Cash and Cash Equivalents held by our foreign subsidiaries as of December 31, 2011. Wherever possible, cash management is centralized and intercompany financing is used to provide working capital to subsidiaries as needed. Our current ratio was 2.2 as of December 31, 2012 and 2011, based on working capital of $151.8 million and $148.1 million, respectively.

Our Debt-to-Capital ratio was 12.1% as of December 31, 2012, compared with 14.2% as of December 31, 2011. Our capital structure was comprised of $32.3 million of Long-Term Debt and $235.1 million of Shareholders’ Equity as of December 31, 2012.

Cash Flow Summary – Cash provided by (used in) our operating, investing and financing activities is summarized as follows (in thousands):

	2012			2011			2010
Operating Activities	$	47,566		$	56,909		$	42,530
Investing Activities:
Purchases of Property, Plant and Equipment, Net of Disposals	(14,595		)	(13,301		)	(9,934		)
Acquisitions of Businesses, Net of Cash Acquired	(750		)	(2,917		)	(86		)
Proceeds from Sale of Business	1,014			—			—
Decrease (Increase) in Restricted Cash	3,089			(3,279		)	—
Financing Activities	(34,932		)	(24,247		)	(10,342		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	209			(355		)	(701		)
Net Increase in Cash and Cash Equivalents	$	1,601		$	12,810		$	21,467

Operating Activities – Cash provided by operating activities was $47.6 million in 2012, $56.9 million in 2011 and $42.5 million in 2010. In 2012, cash provided by operating activities was driven by $41.6 million of Net Earnings and an increase in Accounts Receivable, somewhat offset by a decrease in accrued Employee Compensation and Benefits. The increase in Accounts Receivables is due to variety of terms offered and mix of business. Cash provided by operating activities was $9.3 million lower in 2012 as compared to 2011 primarily due to a $15.0 million discretionary contribution made to the U.S. Pension Plan in December 2012.

In 2011, cash provided by operating activities was driven by $32.7 million of Net Earnings and increased Accounts Payable, somewhat offset by increases in Inventories and Receivables. The increase in Inventories is due to sales and service initiatives. The increases in Accounts Payable and Receivables is due to higher levels of sales. Cash provided by operating activities was $14.4 million higher in 2011 as compared to 2010 primarily due to the smaller increase in Deferred Income Taxes in 2011 as compared to 2010 which was impacted by the international entity restructuring that occurred in the 2010 fourth quarter.

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For 2012, we used operating profit and working capital as key indicators of financial performance and the primary metrics for performance-based incentives.

Two metrics used by management to evaluate how effectively we utilize our net assets are “Accounts Receivable Days Sales Outstanding” (“DSO”) and “Days Inventory on Hand” (“DIOH”), on a FIFO basis. The metrics are calculated on a rolling three month basis in order to more readily reflect changing trends in the business. These metrics for the quarters ended December 31 were as follows (in days):

	2012	2011	2010
DSO	60	58	59
DIOH	78	88	83

DSO increased 2 days in 2012 as compared to 2011 primarily due to the variety of terms offered and mix of business.

DIOH decreased 10 days in 2012 as compared to 2011 primarily due to progress from inventory reduction initiatives.

Investing Activities – Net cash used for investing activities was $11.2 million in 2012, $19.5 million in 2011 and $10.0 million in 2010. Net capital expenditures were $14.6 million during 2012 as compared to $13.3 million in 2011. Net capital expenditures were $9.9 million in 2010. Our 2012 capital expenditures included tooling related to new product development, manufacturing equipment and information technology process improvement projects.

Capital expenditures in 2011 included tooling related to new product development, investments in our facilities including the new plant in China, technology upgrades, and manufacturing and lab equipment. Capital expenditures in 2010 included technology upgrades and tooling related to new product development and manufacturing equipment.

Financing Activities – Net cash used for financing activities was $34.9 million in 2012, $24.2 million in 2011 and $10.3 million in 2010. In 2012, payments of floating rate Long-Term Debt used $3.0 million and payments of dividends used $12.8 million. In 2011, payments of floating rate Long-Term Debt used $19.3 million, which was more than offset by a $20.0 million issuance of fixed rate Long-Term Debt, and payments of dividends used $12.9 million. In 2010, payments of dividends used $11.2 million and payments of Long-Term Debt used $4.2 million. Our annual cash dividend payout increased for the 41^st consecutive year to $0.69 per share in 2012, an increase of $0.01 per share over 2011.

Proceeds from the issuance of Common Stock generated $4.2 million in 2012, $4.2 million in 2011 and $6.5 million in 2010.

On April 25, 2012, the Board of Directors authorized the repurchase of 1,000,000 shares of our common stock. This was in addition to the 618,050 shares remaining under our current repurchase program at that time. At December 31, 2012, there were 1,098,230 remaining shares authorized for repurchase.

There were 621,340 shares repurchased in 2012, 469,304 shares repurchased in 2011 and 100,000 shares repurchased during 2010, at average repurchase prices of $40.78 during 2012, $37.51 during 2011 and $31.53 during 2010. Our Credit Agreement with JPMorgan Chase Bank limits the payment of dividends and repurchases of stock to amounts ranging from $50.0 million to $75.0 million per fiscal year based on our leverage ratio after giving effect to such payments for the life of the agreement.

Indebtedness – As of December 31, 2012, we had committed lines of credit totaling approximately $125.0 million and uncommitted lines of credit totaling approximately $87.6 million. There was $10.0 million in outstanding borrowings under our JPMorgan facility and $20.0 million borrowings under our Prudential facility as of December 31, 2012. In addition, we had stand alone letters of credit of approximately $2.0 million outstanding and bank guarantees in the amount of approximately $0.5 million. Commitment fees on unused lines of credit for the year ended December 31, 2012 were $0.3 million.

Our most restrictive covenants are part of our Credit Agreement with JPMorgan, which are the same covenants in our Shelf Agreement with Prudential described below, and require us to maintain an indebtedness to EBITDA ratio of not greater than 3.00 to 1 and to maintain an EBITDA to interest expense ratio of no less than 3.50 to 1 as of the end of each quarter. As of December 31, 2012, our indebtedness to EBITDA ratio was 0.43 to 1 and our EBITDA to interest expense ratio was 32.96 to 1.

Credit Facilities

JPMorgan Chase Bank, National Association

On May 5, 2011, we entered into a Credit Agreement (the “2011 Credit Agreement”) with JPMorgan Chase Bank, N. A. (“JPMorgan”), as administrative agent and collateral agent, U.S. Bank National Association, as syndication agent, Wells Fargo Bank, National Association, and RBS Citizens, N.A., as co-documentation agents, and the Lenders (including JPMorgan) from time to time party thereto. Upon entry into the 2011 Credit Agreement, we repaid and terminated our June 19, 2007 Credit Agreement. The 2011 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior unsecured credit facility until May 5, 2016, in the amount of $125.0 million, with an option to expand by up to $62.5 million to a total of $187.5 million. Borrowings may be denominated in U.S. Dollars or certain other currencies. The 2011 Credit Agreement contains a $100.0 million sublimit on borrowings by foreign subsidiaries.

The fee for committed funds under the 2011 Credit Agreement ranges from an annual rate of 0.25% to 0.40%, depending on our leverage ratio. Borrowings under the 2011 Credit Agreement bear interest at a rate per annum equal to the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50% and (c) the adjusted LIBOR rate for a one month period plus 1.0%, plus, in any such case, an additional spread of 0.50% to 1.10%, depending on our leverage ratio.

The 2011 Credit Agreement gives the lenders a pledge of 65% of the stock of certain first tier foreign subsidiaries. The obligations under the 2011 Credit Agreement are also guaranteed by our first tier domestic subsidiaries.

The 2011 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 2011 Credit Agreement contains the following covenants:

• a covenant requiring us to maintain an indebtedness to EBITDA ratio as of the end of each quarter of not greater than 3.00 to 1;

• a covenant requiring us to maintain an EBITDA to interest expense ratio as of the end of each quarter of no less than 3.50 to 1;

• a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50.0 million to $75.0 million during any fiscal year based on our leverage ratio after giving effect to such payments; and

• a covenant restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25.0 million.

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As of December 31, 2012 we were in compliance with all covenants under the Credit Agreement. There was $10.0 million in outstanding borrowings under this facility at December 31, 2012, with a weighted average interest rate of 1.72%.

Prudential Investment Management, Inc.

On May 5, 2011, we entered into Amendment No. 1 to our Private Shelf Agreement (the “Amendment”), which amends the Private Shelf Agreement, dated as of July 29, 2009, with Prudential Investment Management, Inc. (“Prudential”) and Prudential affiliates from time to time party thereto (the “Shelf Agreement”).

The Amendment principally provides the following changes to the Shelf Agreement:

• elimination of the security interest in our personal property and subsidiaries;

• an amendment to the maximum leverage ratio to not greater than 3.00 to 1 for any period ending on or after March 31, 2011;

• an amendment to our restriction regarding the payment of dividends or repurchase of stock to restrict us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50.0 million to $75.0 million during any fiscal year based on our leverage ratio after giving effect to such payments; and

• an amendment to Permitted Acquisitions restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25.0 million.

On July 24, 2012, we entered into Amendment No. 2 to our Private Shelf Agreement (“Amendment No. 2”), which amends the Shelf Agreement. The principal change effected by Amendment No. 2 is an extension of the Issuance Period for Shelf Notes under the Shelf Agreement. The Issuance Period now expires on July 24, 2015.

As of December 31, 2012, there was $20.0 million in outstanding borrowings under this facility; the $10.0 million Series A notes issued in March 2011 with a fixed interest rate of 4.00% and a 7 year term serially maturing from 2014 to 2018; and the $10.0 million Series B notes issued in June 2011 with a fixed interest rate of 4.10% and a 10 year term serially maturing from 2015 to 2021. We were in compliance with all covenants of the Shelf Agreement as of December 31, 2012.

The Royal Bank of Scotland Citizens, N.A.

On September 14, 2010, we entered into an overdraft facility with The Royal Bank of Scotland Citizens, N.A. in the amount of 2.0 million Euros or approximately $2.6 million. There was no balance outstanding on this facility as of December 31, 2012.

HSBC Bank (China) Company Limited, Shanghai Branch

On June 20, 2012, we entered into a banking facility with the HSBC Bank (China) Company Limited, Shanghai Branch in the amount of $5.0 million. There was no balance outstanding on this facility as of December 31, 2012.

Notes Payable

On May 31, 2011, we incurred $1.5 million in debt related to installment payments due to the former owners of Water Star in connection with our acquisition of Water Star, of which $0.8 million remains outstanding as of December 31, 2012.

Contractual Obligations – Our contractual obligations as of December 31, 2012, are summarized by period due in the following table (in thousands):

	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years
Long-term debt(1)	$	30,772	$	762	$	5,439	$	16,857	$	7,714
Interest payments on long-term debt(1)	4,142		982		1,734		937		489
Capital leases	1,512		1,241		271		—		—
Interest payments on capital leases	94		77		17		—		—
Retirement benefit plans(2)	1,322		1,322		—		—		—
Deferred compensation arrangements(3)	6,961		537		829		219		5,376
Operating leases(4)	16,821		8,469		6,807		1,456		89
Purchase obligations(5)	50,035		50,035		—		—		—
Other(6)	39		39		—		—		—
Total contractual obligations	$	111,698	$	63,464	$	15,097	$	19,469	$	13,668

(1)Long-term debt represents bank borrowings and borrowings through our Credit Agreement with JPMorgan and our Private Shelf Agreement with Prudential. Our Credit Agreement with JPMorgan does not have specified repayment terms; therefore, repayment is due upon expiration of the agreement on May 5, 2016. Interest payments on our Credit Agreement were calculated using the December 31, 2012 LIBOR rate based on the assumption that the principal would be repaid in full upon the expiration of the agreement. Our borrowings under our Private Shelf Agreement with Prudential have 7 and 10 year terms, serially maturing from 2014 to 2021 with fixed interest rates of 4.00% and 4.10%, respectively.

(2)Our retirement benefit plans, as described in Note 11 of the Consolidated Financial Statements, require us to make contributions to the plans from time to time. Our plan obligations totaled $17.1 million as of December 31, 2012. Contributions to the various plans are dependent upon a number of factors including the market performance of plan assets, if any, and future changes in interest rates, which impact the actuarial measurement of plan obligations. As a result, we have only included our 2013 expected contribution in the contractual obligations table.

(3)The unfunded deferred compensation arrangements covering certain current and retired management employees totaled $7.0 million as of December 31, 2012. Our estimated distributions in the contractual obligations table are based upon a number of assumptions including termination dates and participant distribution elections.

(4)Operating lease commitments consist primarily of office and warehouse facilities, vehicles and office equipment as discussed in Note 13 of the Consolidated Financial Statements.

(5)Purchase obligations include all known open purchase orders, contractual purchase commitments and contractual obligations as of December 31, 2012.

(6)Other obligations include collateralized borrowings as discussed in Note 8 of the Consolidated Financial Statements and residual value guarantees as discussed in Note 13 of the Consolidated Financial Statements.

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Total contractual obligations exclude our gross unrecognized tax benefits of $3.5 million and accrued interest and penalties of $0.5 million as of December 31, 2012. We expect to make cash outlays in the future related to uncertain tax positions. However, due to the uncertainty of the timing of future cash flows, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. For further information related to unrecognized tax benefits, see Note 14 of the Consolidated Financial Statements.

Newly Issued Accounting Guidance

Offsetting Assets and Liabilities Disclosures

In December 2011, the FASB issued updated accounting guidance on disclosures about offsetting assets and liabilities. This update adds certain additional disclosure requirements about financial instruments and derivative instruments that are subject to netting arrangements. The new disclosures are required for interim and annual reporting periods beginning on or after January 1, 2013. We do not expect this guidance to have a material impact on our results of operations or financial position.

Testing Intangibles for Impairment

In July 2012, the FASB issued updated accounting guidance on the periodic testing of indefinite-lived intangible assets for impairment. This updated accounting guidance permits us to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible asset's fair value is less than its carrying amount before applying the two-step goodwill impairment test. If we determine through this qualitative analysis that it is not more likely than not that the fair value of the reporting unit is less than its carrying value, it is not necessary to calculate annually the fair value of an indefinite-lived intangible asset. This guidance is effective for fiscal periods beginning after September 15, 2012; however, early adoption is permitted. We do not expect this guidance to have an impact on our results of operations or financial position as we do not currently hold any indefinite-lived intangible assets.

Critical Accounting Estimates

Our Consolidated Financial Statements are based on the selection and application of accounting principles generally accepted in the United States of America, which require us to make estimates and assumptions about future events that affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to the Consolidated Financial Statements. We believe that the following policies may involve a higher degree of judgment and complexity in their application and represent the critical accounting policies used in the preparation of our Consolidated Financial Statements. If different assumptions or conditions were to prevail, the results could be materially different from our reported results.

Allowance for Doubtful Accounts – We record a reserve for accounts receivable that are potentially uncollectible. A considerable amount of judgment is required in assessing the realization of these receivables including the current creditworthiness of each customer and related aging of the past-due balances. In order to assess the collectibility of these receivables, we perform ongoing credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information becomes available. Our reserves are also based on amounts determined by using percentages applied to trade receivables. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. We are not able to predict changes in the financial condition of our customers and if circumstances related to these customers deteriorate, our estimates of the recoverability of accounts receivable could be materially affected and we may be required to record additional allowances. Alternatively, if more allowances are provided than are ultimately required, we may reverse a portion of such provisions in future periods based on the actual collection experience. Bad debt write-offs as a percentage of Net Sales were approximately 0.3% in 2012, 0.2% in 2011 and 0.3% in 2010. As of December 31, 2012, we had $4.4 million reserved against Accounts Receivable for doubtful accounts.

Inventory Reserves – We value our inventory at the lower of the cost of inventory or fair market value through the establishment of a reserve for excess, slow moving and obsolete inventory. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements compared with inventory levels. Reserve requirements are developed by comparing our inventory levels to our projected demand requirements based on historical demand, market conditions and technological and product life cycle changes. It is possible that an increase in our reserve may be required in the future if there are significant declines in demand for certain products. This reserve creates a new cost basis for these products and is considered permanent. As of December 31, 2012, we had $3.7 million reserved against Inventories.

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 and when an event occurs or circumstances change that may reduce the fair value of one of our reporting units below its carrying amount. A goodwill impairment loss occurs if the carrying amount of a reporting unit’s goodwill exceeds its fair value.

We performed an analysis of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step quantitative goodwill impairment test. The first step of the two-step model is used as an indicator to identify if there is potential goodwill impairment. If the first step indicates there may be an impairment, the second step is performed which measures the amount of the goodwill impairment, if any. We perform our goodwill impairment analysis as of year end and use our judgment to develop assumptions for the discounted cash flow model that we use, if necessary. Management assumptions include forecasting revenues and margins, estimating capital expenditures, depreciation, amortization and discount rates.

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If our goodwill impairment testing resulted in one or more of our reporting units’ carrying amount exceeding its fair value, we would write down our reporting units’ carrying amount to its fair value and would record an impairment charge in our results of operations in the period such determination is made. Subsequent reversal of goodwill impairment charges is not permitted. Each of our reporting units were analyzed for impairment as of December 31, 2012 and based upon our analysis, the estimated fair values of our reporting units substantially exceeded their carrying amounts. We had Goodwill of $19.7 million as of December 31, 2012.

Warranty Reserves – We record a liability for warranty claims at the time of sale. The amount of the liability is based on the trend in the historical ratio of claims to net sales, the historical length of time between the sale and resulting warranty claim, new product introductions and other factors. Future claims experience could be materially different from prior results because of the introduction of new, more complex products, a change in our warranty policy in response to industry trends, competition or other external forces, or manufacturing changes that could impact product quality. In the event we determine that our current or future product repair and replacement costs exceed our estimates, an adjustment to these reserves would be charged to earnings in the period such determination is made. Warranty expense as a percentage of Net Sales was 1.7% in 2012, 1.7% in 2011 and 1.6% in 2010. As of December 31, 2012, we had $9.4 million reserved for future estimated warranty costs.

Income Taxes – We are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax obligations based on expected income, statutory tax rates and tax planning opportunities in the various jurisdictions. We also establish reserves for uncertain tax matters that are complex in nature and uncertain as to the ultimate outcome. Although we believe that our tax return positions are fully supportable, we consider our ability to ultimately prevail in defending these matters when establishing these reserves. We adjust our reserves in light of changing facts and circumstances, such as the closing of a tax audit. We believe that our current reserves are adequate. However, the ultimate outcome may differ from our estimates and assumptions and could impact the income tax expense reflected in our Consolidated Statements of Earnings.

Tax law requires certain items to be included in our tax return at different times than the items are reflected in our results of operations. Some of these differences are permanent, such as expenses that are not deductible in our tax returns, and some differences will reverse over time, such as depreciation expense on property, plant and equipment. These temporary differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance Sheets. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years but have already been recorded as an expense in our Consolidated Statements of Earnings. We assess the likelihood that our deferred tax assets will be recovered from future taxable income, and, based on management’s judgment, to the extent we believe that recovery is not more likely than not, we establish a valuation reserve against those deferred tax assets. The deferred tax asset valuation allowance could be materially different from actual results because of changes in the mix of future taxable income, the relationship between book and taxable income and our tax planning strategies. As of December 31, 2012, a valuation allowance of $4.7 million was recorded against foreign tax loss carry-forwards and state credit carry-forwards.

Cautionary Factors Relevant to Forward-Looking Information

This annual report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contain certain statements that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “project,” or “continue” or similar words or the negative thereof. These statements do not relate to strictly historical or current facts and provide current expectations of forecasts of future events. Any such expectations or forecasts of future events are subject to a variety of factors. Particular risks and uncertainties presently facing us include:

• Geopolitical and economic uncertainty throughout the world.

• Competition in our business.

• Ability to effectively manage organizational changes.

• Ability to comply with laws and regulations.

• Ability to attract and retain key personnel.

• Ability to develop and fund new innovative products and services.

• Unforeseen product liability claims or product quality issues.

• Ability to successfully upgrade and evolve the capabilities of our computer systems.

• Ability to effectively maintain and manage the data in our computer systems.

• Occurrence of a significant business interruption.

• Relative strength of the U.S. dollar, which affects the cost of our materials and products purchased and sold internationally.

• Ability to acquire, retain and protect proprietary intellectual property rights.

• Fluctuations in the cost or availability of raw materials and purchased components.

We caution that forward-looking statements must be considered carefully and that actual results may differ in material ways due to risks and uncertainties both known and unknown. Information about factors that could materially affect our results can be found in Part I, Item 1A - Risk Factors. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are advised to consult any further disclosures by us in our filings with the Securities and Exchange Commission and in other written statements on related subjects. It is not possible to anticipate or foresee all risk factors, and investors should not consider any list of such factors to be an exhaustive or complete list of all risks or uncertainties.

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ITEM 7A – Quantitative and Qualitative Disclosures About Market Risk

Commodity Risk –We are subject to exposures resulting from potential cost increases related to our purchase of raw materials or other product components. We do not use derivative commodity instruments to manage our exposures to changes in commodity prices such as steel, oil, gas, lead and other commodities.

Various factors beyond our control affect the price of oil and gas, including but not limited to worldwide and domestic supplies of oil and gas, political instability or armed conflict in oil-producing regions, the price and level of foreign imports, the level of consumer demand, the price and availability of alternative fuels, domestic and foreign governmental regulation, weather-related factors and the overall economic environment. We purchase petroleum-related component parts for use in our manufacturing operations. In addition, our freight costs associated with shipping and receiving product and sales and service vehicle fuel costs are impacted by fluctuations in the cost of oil and gas.

Increases in worldwide demand and other factors affect the price for lead, steel and related products. We do not maintain an inventory of raw or fabricated steel or batteries in excess of near-term production requirements. As a result, increases in the price of lead or steel can significantly increase the cost of our lead- and steel-based raw materials and component parts.

During the first part of 2012, our raw materials and other purchased component costs were unfavorably impacted by commodity prices although we were able to somewhat mitigate these higher costs with pricing actions and cost reduction activities. We continue to focus on mitigating the risk of continued future raw material or other product component cost increases through product pricing, negotiations with our vendors and cost reduction actions. The success of these efforts will depend upon our ability to increase our selling prices in a competitive market and our ability to achieve cost savings. If the commodity prices increase significantly and we are not able to offset the increases with higher selling prices, our results may be unfavorably impacted in 2013.

Foreign Currency Exchange Risk –Due to the global nature of our operations, we are subject to exposures resulting from foreign currency exchange fluctuations in the normal course of business. Our primary exchange rate exposures are with the Euro, Australian and Canadian dollars, British pound, Japanese yen, Chinese yuan and Brazilian real against the U.S. dollar. The direct financial impact of foreign currency exchange includes the effect of translating profits from local currencies to U.S. dollars, the impact of currency fluctuations on the transfer of goods between Tennant operations in the United States and abroad and transaction gains and losses. In addition to the direct financial impact, foreign currency exchange has an indirect financial impact on our results, including the effect on sales volume within local economies and the impact of pricing actions taken as a result of foreign exchange rate fluctuations.

Because a substantial portion of our products are manufactured or sourced primarily from the United States, a stronger U.S. dollar generally has a negative impact on results from operations outside the United States while a weaker dollar generally has a positive effect. Our objective in managing the exposure to foreign currency fluctuations is to minimize the earnings effects associated with foreign exchange rate changes on certain of our foreign currency-denominated assets and liabilities. We periodically enter into various contracts, principally forward exchange contracts, to protect the value of certain of our foreign currency-denominated assets and liabilities. The gains and losses on these contracts generally approximate changes in the value of the related assets and liabilities. We had forward exchange contracts outstanding in the notional amounts of $42.5 million and $45.5 million at the end of 2012 and 2011, respectively. The potential for material loss in fair value of foreign currency contracts outstanding and the related underlying exposures as of December 31, 2012, from a 10% adverse change is unlikely

due to the short-term nature of our forward contracts. Our policy prohibits us from entering into transactions for speculative purposes.

Other Matters –Management regularly reviews our business operations with the objective of improving financial performance and maximizing our return on investment. As a result of this ongoing process to improve financial performance, we may incur additional restructuring charges in the future which, if taken, could be material to our financial results.

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ITEM 8 – Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

Tennant Company:

We have audited the accompanying consolidated balance sheets of Tennant Company and subsidiaries (the Company) as of December 31, 2012 and 2011, and the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as included in Item 15.A.2. We also have audited the Company's internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Tennant Company and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the accompanying financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Furthermore, in our opinion, Tennant Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ KPMG LLP

Minneapolis, Minnesota

February 21, 2013

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Consolidated Statements of Earnings

TENNANT COMPANY AND SUBSIDIARIES

(In thousands, except shares and per share data)

Years ended December 31	2012			2011			2010
Net Sales	$	738,980		$	753,998		$	667,667
Cost of Sales	413,684			434,817			383,341
Gross Profit	325,296			319,181			284,326
Operating Expense:
Research and Development Expense	29,263			27,911			25,957
Selling and Administrative Expense	234,114			241,625			221,235
Gain on Sale of Business	(784		)	—			—
Total Operating Expense	262,593			269,536			247,192
Profit from Operations	62,703			49,645			37,134
Other Income (Expense):
Interest Income	1,069			752			133
Interest Expense	(2,517		)	(2,238		)	(1,619		)
Net Foreign Currency Transaction (Losses) Gains	(1,403		)	559			(902		)
Other Income (Expense), Net	38			12			(19		)
Total Other Expense, Net	(2,813		)	(915		)	(2,407		)
Profit Before Income Taxes	59,890			48,730			34,727
Income Tax Expense (Benefit)	18,306			16,017			(76		)
Net Earnings	$	41,584		$	32,713		$	34,803
Net Earnings per Share:
Basic	$	2.24		$	1.74		$	1.85
Diluted	$	2.18		$	1.69		$	1.80
Weighted Average Shares Outstanding:
Basic	18,544,896			18,832,693			18,805,494
Diluted	19,102,016			19,360,428			19,332,103
Cash Dividends Declared per Common Share	$	0.69		$	0.68		$	0.59

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

TENNANT COMPANY AND SUBSIDIARIES

(In thousands, except shares and per share data)

Years ended December 31	2012			2011			2010
Net Earnings	$	41,584		$	32,713		$	34,803
Other Comprehensive Income (Loss), net of tax:
Foreign currency translation adjustments, net of income tax (expense) of $(25), $- and $-, respectively	552			(3,141		)	762
Pension adjustments, net of income tax benefit (expense) of $889, $2,354 and $(98), respectively	(1,648		)	(3,822		)	73
Total Other Comprehensive (Loss) Income, net of tax	(1,096		)	(6,963		)	835
Comprehensive Income	$	40,488		$	25,750		$	35,638

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Balance Sheets

TENNANT COMPANY AND SUBSIDIARIES

(In thousands, except shares and per share data)

December 31	2012			2011
ASSETS
Current Assets:
Cash and Cash Equivalents	$	53,940		$	52,339
Restricted Cash	187			3,279
Receivables:
Trade, less Allowances of $4,399 and $4,828, respectively	131,470			123,920
Other	6,677			4,953
Net Receivables	138,147			128,873
Inventories	58,136			65,912
Prepaid Expenses	11,309			10,320
Deferred Income Taxes, Current Portion	11,339			10,358
Other Current Assets	388			1,015
Total Current Assets	273,446			272,096
Property, Plant and Equipment	294,910			286,949
Accumulated Depreciation	(208,717		)	(199,795		)
Property, Plant and Equipment, Net	86,193			87,154
Deferred Income Taxes, Long-Term Portion	10,989			15,014
Goodwill	19,717			20,303
Intangible Assets, Net	21,393			23,758
Other Assets	9,022			5,937
Total Assets	$	420,760		$	424,262
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-Term Debt	$	2,042		$	4,166
Accounts Payable	47,002			46,869
Employee Compensation and Benefits	33,021			32,934
Income Taxes Payable	785			619
Other Current Liabilities	38,844			39,404
Total Current Liabilities	121,694			123,992
Long-Term Liabilities:
Long-Term Debt	30,281			32,289
Employee-Related Benefits	25,873			40,089
Deferred Income Taxes, Long-Term Portion	3,325			3,189
Other Liabilities	4,533			3,851
Total Long-Term Liabilities	64,012			79,418
Total Liabilities	185,706			203,410
Commitments and Contingencies (Note 13)
Shareholders' Equity:
Preferred Stock of $0.02 par value per share, 1,000,000 shares authorized; no shares issued or outstanding	—			—
Common Stock, $0.375 par value per share, 60,000,000 shares authorized; 18,464,450 and 18,834,940 issued and outstanding, respectively	6,924			7,063
Additional Paid-In Capital	22,398			15,082
Retained Earnings	236,065			227,944
Accumulated Other Comprehensive Loss	(30,333		)	(29,237		)
Total Shareholders’ Equity	235,054			220,852
Total Liabilities and Shareholders’ Equity	$	420,760		424,262

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

TENNANT COMPANY AND SUBSIDIARIES

(In thousands)

Years ended December 31	2012			2011			2010
OPERATING ACTIVITIES
Net Earnings	$	41,584		$	32,713		$	34,803
Adjustments to reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation	18,072			18,088			18,026
Amortization	2,800			3,330			3,166
Impairment of Intangible Assets	—			2,058			—
Deferred Income Taxes	3,166			(1,352		)	(11,412		)
Share-Based Compensation Expense	9,092			5,407			4,639
Allowance for Doubtful Accounts and Returns	1,427			1,879			1,403
Gain on Sale of Business	(784		)	—			—
Other, Net	(126		)	508			503
Changes in Operating Assets and Liabilities, Excluding the Impact of Acquisitions:
Accounts Receivable	(11,811		)	(4,451		)	(7,931		)
Inventories	(149		)	(7,665		)	(4,391		)
Accounts Payable	970			4,612			(1,445		)
Employee Compensation and Benefits	(3,005		)	1,177			1,162
Other Current Liabilities	1,549			1,711			6,058
Income Taxes	797			1,668			(1,716		)
U.S. Pension Plan Contributions	(16,731		)	—			—
Other Assets and Liabilities	715			(2,774		)	(335		)
Net Cash Provided by Operating Activities	47,566			56,909			42,530
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(15,623		)	(13,902		)	(10,529		)
Proceeds from Disposals of Property, Plant and Equipment	1,028			601			595
Acquisition of Businesses, Net of Cash Acquired	(750		)	(2,917		)	(86		)
Proceeds from Sale of Business	1,014			—			—
Decrease (Increase) in Restricted Cash	3,089			(3,279		)	—
Net Cash Used for Investing Activities	(11,242		)	(19,497		)	(10,020		)
FINANCING ACTIVITIES
Change in Short-Term Borrowings, Net	—			—			(7		)
Payments of Long-Term Debt	(2,986		)	(19,272		)	(4,192		)
Issuance of Long-Term Debt	—			20,000			—
Purchases of Common Stock	(25,343		)	(17,603		)	(3,153		)
Proceeds from Issuances of Common Stock	4,167			4,214			6,467
Tax Benefit on Stock Plans	2,047			1,266			1,724
Dividends Paid	(12,817		)	(12,852		)	(11,181		)
Net Cash Used for Financing Activities	(34,932		)	(24,247		)	(10,342		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	209			(355		)	(701		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,601			12,810			21,467
Cash and Cash Equivalents at Beginning of Year	52,339			39,529			18,062
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	53,940		$	52,339		$	39,529
SUPPLEMENTAL CASH FLOW INFORMATION
Cash Paid During the Year for:
Income Taxes	$	11,563		$	13,158		$	13,908
Interest	$	2,375		$	2,059		$	1,559
Supplemental Non-Cash Investing and Financing Activities:
Capital Expenditures Funded Through Capital Leases	$	1,526		$	2,893		$	2,398
Capital Expenditures in Accounts Payable	$	1,582		$	2,669		$	689
Collateralized Borrowings	$	39		$	127		$	471
Notes Payable Related to Water Star, Inc. Acquisition	$	—		$	1,500		$	—

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Shareholders’ Equity

TENNANT COMPANY AND SUBSIDIARIES

(In thousands, except shares and per share data)

	Common Shares		Common Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders' Equity
Balance, December 31, 2009	18,750,828		$	7,032		$	7,772		$	192,584		$	(23,109	)	$	184,279
Net Earnings	—		—			—			34,803			—			34,803
Other Comprehensive Income	—		—			—			—			835			835
Issue Stock for Directors, Employee Benefit and Stock Plans	388,015		146			6,029			—			—			6,175
Share-Based Compensation	—		—			2,651			—			—			2,651
Dividends paid $0.59 per Common Share	—		—			—			(11,181		)	—			(11,181		)
Tax Benefit on Stock Plans	—		—			1,724			—			—			1,724
Purchases of Common Stock	(100,000	)	(38		)	(7,300		)	4,185			—			(3,153		)
Balance, December 31, 2010	19,038,843		$	7,140		$	10,876		$	220,391		$	(22,274	)	$	216,133
Net Earnings	—		—			—			32,713			—			32,713
Other Comprehensive Loss	—		—			—			—			(6,963		)	(6,963		)
Issue Stock for Directors, Employee Benefit and Stock Plans	265,401		99			4,019			—			—			4,118
Share-Based Compensation	—		—			4,041			—			—			4,041
Dividends paid $0.68 per Common Share	—		—			—			(12,852		)	—			(12,852		)
Tax Benefit on Stock Plans	—		—			1,265			—			—			1,265
Purchases of Common Stock	(469,304	)	(176		)	(5,119		)	(12,308		)	—			(17,603		)
Balance, December 31, 2011	18,834,940		$	7,063		$	15,082		$	227,944		$	(29,237	)	$	220,852
Net Earnings	—		—			—			41,584			—			41,584
Other Comprehensive Loss	—		—			—			—			(1,096		)	(1,096		)
Issue Stock for Directors, Employee Benefit and Stock Plans	250,850		94			2,423			—			—			2,517
Share-Based Compensation	—		—			7,310			—			—			7,310
Dividends paid $0.69 per Common Share	—		—			—			(12,817		)	—			(12,817		)
Tax Benefit on Stock Plans	—		—			2,047			—			—			2,047
Purchases of Common Stock	(621,340	)	(233		)	(4,464		)	(20,646		)	—			(25,343		)
Balance, December 31, 2012	18,464,450		$	6,924		$	22,398		$	236,065		$	(30,333	)	$	235,054

The Company had 60,000,000 authorized shares of Common Stock as of December 31, 2012, 2011 and 2010.

See accompanying Notes to Consolidated Financial Statements.

21

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

1. Summary of Significant Accounting Policies

Nature of Operations – Our primary business is designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. Our products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; chemical-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading floors and other surfaces. We sell our products through our direct sales and service organization and a network of authorized distributors worldwide. Geographically, our customers are located in North America, Latin America, Europe, the Middle East, Africa and Asia Pacific.

Consolidation – The Consolidated Financial Statements include the accounts of Tennant Company and its subsidiaries. All intercompany transactions and balances have been eliminated. In these Notes to the Consolidated Financial Statements, Tennant Company is referred to as “Tennant,” “we,” “us,” or “our.”

Translation of Non-U.S. Currency – Foreign currency-denominated assets and liabilities have been translated to U.S. dollars at year-end exchange rates, while income and expense items are translated at average exchange rates prevailing during the year. Gains or losses resulting from translation are included as a separate component of Shareholders’ Equity. The balance of cumulative foreign currency translation adjustments recorded within Accumulated Other Comprehensive Loss as of December 31, 2012, 2011 and 2010 was a net loss of $19,900, $20,286 and $17,145, respectively. Translation adjustments are not adjusted for income taxes as substantially all translation adjustments relate to permanent investments in non-U.S. subsidiaries. Net Foreign Currency Transaction (Losses) Gains are included in Other Income (Expense).

Use of Estimates – In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. 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. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. A number of these factors include, among others, economic conditions, credit markets, foreign currency, commodity cost volatility and consumer spending and confidence, all of which have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual amounts could differ significantly from those estimated at the time the consolidated financial statements are prepared. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Cash and Cash Equivalents – We consider all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents.

Restricted Cash – We have a total of $187 that serves as collateral backing certain bank guarantees and is therefore restricted. This money is invested in time deposits.

Receivables – Credit is granted to our customers in the normal course of business. Receivables are recorded at original carrying value less reserves for estimated uncollectible accounts and sales returns. To assess the collectability of these receivables, we perform ongoing credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information becomes available. Our reserves are also based on amounts determined by using percentages applied to trade receivables. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. An account is considered past-due or delinquent when it has not been paid within the contractual terms. Uncollectible accounts are written off against the reserves when it is deemed that a customer account is uncollectible.

Inventories – Inventories are valued at the lower of cost or market. 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.

Property, Plant and Equipment – Property, plant and equipment is carried at cost. Additions and improvements that extend the lives of the assets are capitalized while expenditures for repairs and maintenance are expensed as incurred. We generally depreciate buildings and improvements by the straight-line method over a life of 30 years. Other property, plant and equipment are generally depreciated using the straight-line method based on lives of 3 years to 15 years.

Goodwill – Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. We analyze Goodwill on an annual basis as of year end and when an event occurs or circumstances change that may reduce the fair value of one of our reporting units below its carrying amount. A goodwill impairment occurs if the carrying amount of a reporting unit’s goodwill exceeds its fair value. In assessing the recoverability of Goodwill, in 2011 we began using an analysis of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Prior to 2011, in assessing the recoverability of Goodwill, we used a discounted cash flow model to estimate the reporting unit’s fair value to compare to its carrying amount. Management used judgment to develop assumptions for the discounted cash flow model including forecasting revenues and margins, estimating capital expenditures, depreciation, amortization and discount rates.

Intangible Assets – Intangible Assets consist of definite lived customer lists, service contracts, an acquired trade name and technology. Intangible Assets with a definite life are amortized on a straight-line basis.

Impairment of Long-lived Assets – 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

22

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

operating cash flows is 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.

Purchases of Common Stock – We repurchase our Common Stock under a 2011 and a 2012 repurchase program authorized by our Board of Directors. These programs allow us to repurchase up to 2,000,000 shares of our Common Stock. Upon repurchase, the par value is charged to Common Stock and the remaining purchase price is charged to Additional Paid-in Capital. If the amount of the remaining purchase price causes the Additional Paid-in Capital account to be in a debit position, this amount is then reclassified to Retained Earnings. Common Stock repurchased is included in shares authorized but is not included in shares outstanding.

Warranty – We record a liability for estimated warranty claims at the time of sale. The amount of the liability is based on the trend in the historical ratio of claims to sales, the historical length of time between the sale and resulting warranty claim, new product introductions and other factors. In the event we determine that our current or future product repair and replacement costs exceed our estimates, an adjustment to these reserves would be charged to earnings in the period such determination is made. Warranty terms on machines range from one to four years.

Environmental – We record a liability for environmental clean-up on an undiscounted basis when a loss is probable and can be reasonably estimated.

Pension and Profit Sharing Plans – We have pension and/or profit sharing plans covering substantially all of our employees. Pension plan costs are accrued based on actuarial estimates with the required pension cost funded annually, as needed. No new participants have entered the pension plan since 2000.

Postretirement Benefits – We accrue and recognize the cost of retiree health benefits over the employees’ period of service based on actuarial estimates. Benefits are only available for for U.S. employees hired before January 1, 1999.

Derivative Financial Instruments – We use derivative instruments to manage exposures to foreign currency only in an attempt to limit underlying exposures from currency fluctuations and not for trading purposes. We periodically enter into various contracts, principally forward exchange contracts, to protect the value of certain of our foreign currency-denominated assets and liabilities (principally the Euro, Australian and Canadian dollars, British pound, Japanese yen, Chinese yuan and Brazilian real). We have elected not to apply hedge accounting treatment to these contracts as our contracts are for a short duration. These contracts are marked-to-market with the related asset or liability recorded in Other Current Assets or Other Current Liabilities, as applicable. The gains and losses on these contracts generally approximate changes in the value of the related assets and liabilities. Gains or losses on forward foreign exchange contracts to economically hedge foreign currency-denominated net assets and liabilities are recognized in Other Income (Expense) under Net Foreign Currency Transaction (Losses) Gains within the Consolidated Statements of Earnings.

Revenue Recognition – We recognize revenue when persuasive evidence of an arrangement exists, title and risk of ownership have passed, the sales price is fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met at the time the product is shipped. Provisions for estimated returns, rebates and discounts are provided for at the time the related revenue is recognized. Freight revenue billed to customers is included in Net Sales and the related shipping expense is included in Cost of Sales. Service revenue is recognized in the period the service is performed or ratably over the period of the related service contract.

Customers may obtain financing through third-party leasing companies to assist in their acquisition of our equipment products. Certain lease transactions classified as operating leases contain retained ownership provisions or guarantees, which results in recognition of revenue over the lease term. As a result, we defer the sale of these transactions and record the sales proceeds as collateralized borrowings or deferred revenue. The underlying equipment relating to operating leases is depreciated on a straight-line basis, not to exceed the equipment’s estimated useful life.

Revenues from contracts with multiple element arrangements are recognized as each element is earned. We offer service contracts in conjunction with equipment sales in addition to selling equipment and service contracts separately. Sales proceeds related to service contracts are deferred if the proceeds are received in advance of the service and recognized ratably over the contract period.

Share-based Compensation – We account for employee share-based compensation using the fair value based method. Our share-based compensation plans are more fully described in Note 15 of the Consolidated Financial Statements.

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. These efforts include tradeshows, online advertising, e-mail marketing, mailings, sponsorships and telemarketing. Advertising costs are expensed as incurred. In 2012, 2011 and 2010 such activities amounted to $6,466, $6,728 and $5,516, respectively.

Income Taxes – Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the book and tax bases of existing assets and liabilities. A valuation allowance is provided when, in management’s judgment, it is more likely than not that some portion or all of the deferred tax asset will not be realized. We have established contingent tax liabilities using management’s best judgment. We follow guidance provided by ASC 740, Income Taxes, regarding uncertainty in income taxes, to record these contingent tax liabilities (refer to Note 14 of the Consolidated Financial Statements for additional information). We adjust these liabilities as facts and circumstances change. Interest Expense is recognized in the first period the interest would begin accruing. Penalties are recognized in the period we claim or expect to claim the position in our tax return. Interest and penalties expenses are classified as an income tax expense.

Sales Tax –Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis.

Earnings per Share – Basic earnings per share is computed by dividing Net Earnings by the Weighted Average Shares Outstanding during the period. Diluted earnings per share assume conversion of potentially dilutive stock options and restricted share awards. Performance-based shares are included in the calculation of diluted earnings per share in the quarter in which the performance targets have been achieved.

23

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

2. Newly Adopted Accounting Pronouncements

Fair Value Measurements and Disclosures

In May 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance for fair value measurements providing common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. While the guidance is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands existing disclosure requirements for fair value measurements and makes other amendments. Key additional disclosures include quantitative disclosures about unobservable inputs in Level 3 measures, qualitative information about sensitivity of Level 3 measures and valuation process, and classification within the fair value hierarchy for instruments where fair value is only disclosed in the footnotes but the carrying amount is on some other basis. We adopted this guidance January 1, 2012. This guidance did not have an impact on our results of operations or financial position.

Comprehensive Income

In June 2011, the FASB issued guidance on the presentation of comprehensive income that requires us to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of equity. In December 2011, the FASB issued an amendment to this standard which defers the requirement that companies present reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements and requires retrospective application. We adopted this guidance January 1, 2012. Since this standard impacts presentation and disclosure requirements only, this adopted guidance did not have an impact on our results of operations or financial position.

3. Management Actions

2010 Action – During the fourth quarter of 2010, we implemented a restructuring action. A pre-tax charge of $1,671 was recognized in the fourth quarter of 2010 as a result of that action. The pre-tax charge consisted of severance and outplacement services and was included within Selling and Administrative Expense in the 2010 Consolidated Statement of Earnings.

A reconciliation of the beginning and ending liability balances is as follows:

	Severance, Early Retirement and Related Costs
2010 restructuring action	$	1,671
Cash payments	(87		)
December 31, 2010 balance	$	1,584
2011 utilization:
Cash payments	(1,534		)
Foreign currency adjustments	(54		)
Change in estimate	110
December 31, 2011 balance	$	106
2012 utilization:
Cash payments	(102		)
Foreign currency adjustments	(4		)
December 31, 2012 balance	$	—

24

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

2012 Action – During the third quarter of 2012, we implemented a restructuring action. A pre-tax charge of $760 was recognized in the third quarter as a result of this action. The pre-tax charge consisted primarily of severance and outplacement services and was included within Selling and Administrative Expense in the Consolidated Statements of Earnings.

A reconciliation of the beginning and ending liability balances is as follows:

	Severance and Related Costs
2012 restructuring action	$	760
Cash payments	(414		)
Foreign currency adjustments	27
December 31, 2012 balance	$	373

4. Acquisitions and Divestitures

Acquisitions

On May 31, 2011, we acquired Water Star, Inc. (“Water Star”), a Newbury, Ohio firm specializing in electrochemistry for $4,456. The total purchase price of $4,456 is comprised of $2,956 paid at closing and two$750 installment payments which will be paid in cash on the first and second anniversary dates of the acquisition. The first installment payment was made on May 31, 2012. These installment payments are not contingent on any future services or other financial targets. This acquisition is consistent with our strategy to expand our intellectual property in support of our long-term vision to deliver sustainable, breakthrough innovations.

The components of the purchase price of the business combination described above have been allocated as follows:

Current Assets	$	426
Property, Plant and Equipment, net	167
Identified Intangible Assets	3,800
Goodwill	472
Total Assets Acquired	4,865
Current Liabilities	409
Total Liabilities Assumed	409
Net Assets Acquired	$	4,456

25

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

Divestitures

On July 31, 2012, we entered into a Share Purchase Agreement (“SPA”) with M&F Management and Financing GmbH (“M&F”) for the sale of ownership of our subsidiary, Tennant CEE GmbH and our minority interest in a joint venture, OOO Tennant. In exchange for the ownership of these entities, we received €815, or $1,014 as of the date of sale, in cash and financed the remaining purchase price of €6,166. A total of €2,126, or $2,806 as of December 31, 2012, will be received in equal quarterly payments during 2013 and the remaining €3,225, or $4,257 as of December 31, 2012, will be received in equal installments on the first, second and third anniversary dates of the divestiture. As a result of this divestiture, we recorded a pre-tax gain of $784 in our Profit from Operations in the Consolidated Statements of Earnings.

M&F is now a master distributor of Tennant products in the Central Eastern Europe, Middle East and Africa markets. In addition, as further discussed in Note 19, M&F is a related party to Tennant. We have identified M&F as a variable interest entity (“VIE”) and have performed a qualitative assessment that considered M&F's purpose and design, our involvement and the risks and benefits and determined that Tennant is not the primary beneficiary of this VIE. The only financing Tennant has provided to M&F was related to the SPA as noted above and there are no arrangements that would require us to provide significant financial support in the future.

The assets and liabilities transferred under the Share Purchase Agreement on the date of sale were as follows:

Accounts Receivable	$	4,398
Inventories	4,271
Other Current Assets	87
Current Assets	8,756
Property, Plant and Equipment, net	170
Total Assets Divested	8,926
Current Liabilities	1,121
Total Liabilities Divested	1,121
Net Assets Divested	$	7,805

5. Inventories

Inventories as of December 31, consisted of the following:

	2012			2011
Inventories carried at LIFO:
Finished goods	$	33,546		$	32,648
Raw materials, production parts and work-in-process	14,291			16,611
LIFO reserve	(27,608		)	(27,926		)
Total LIFO inventories	20,229			21,333
Inventories carried at FIFO:
Finished goods	25,623			31,912
Raw materials, production parts and work-in-process	12,284			12,667
Total FIFO inventories	37,907			44,579
Total Inventories	$	58,136		$	65,912

The LIFO reserve approximates the difference between LIFO carrying cost and FIFO.

26

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

6. Property, Plant and Equipment

Property, Plant and Equipment and related Accumulated Depreciation, including equipment under capital leases, as of December 31, consisted of the following:

	2012			2011
Land	$	4,294		$	4,383
Buildings and improvements	52,597			49,931
Machinery and manufacturing equipment	140,330			135,794
Office equipment	88,814			86,740
Work in progress	8,875			10,101
Total Property, Plant and Equipment	294,910			286,949
Less: Accumulated Depreciation	(208,717		)	(199,795		)
Net Property, Plant and Equipment	$	86,193		$	87,154

Depreciation expense was $18,072 in 2012, $18,088 in 2011 and $18,026 in 2010.

7. Goodwill and Intangible Assets

For purposes of performing our goodwill impairment analysis, we have identified our reporting units as North America; Latin America; Europe, Middle East, Africa (“EMEA”) and Asia Pacific. As of December 31, 2012 and 2011, the Company performed an analysis of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Based on the Company’s analysis of qualitative factors, the Company determined that is was not necessary to perform the two-step goodwill impairment test for any of its reporting units. Each of our reporting units were tested for impairment using the two-step goodwill impairment test as of December 31, 2010 and based upon our analysis, the estimated fair values of our reporting units substantially exceeded their carrying amounts.

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

	Goodwill			Accumulated Impairment Losses			Total
Balance as of December 31, 2011	$	66,523		$	(46,220	)	$	20,303
Foreign currency fluctuations	2,062			(2,648		)	(586		)
Balance as of December 31, 2012	$	68,585		$	(48,868	)	$	19,717
Balance as of December 31, 2010	$	67,008		$	(46,585	)	$	20,423
Additions	688			—			688
Foreign currency fluctuations	(1,173		)	365			(808		)
Balance as of December 31, 2011	$	66,523		$	(46,220	)	$	20,303

27

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

The balances of acquired Intangible Assets, excluding Goodwill, as of December 31, are as follows:

	Customer Lists and Service Contracts			Trade Name			Technology			Total
Balance as of December 31, 2012
Original cost	$	23,817		$	4,657		$	7,197		$	35,671
Accumulated amortization	(9,907		)	(1,565		)	(2,806		)	(14,278		)
Carrying amount	$	13,910		$	3,092		$	4,391		$	21,393
Weighted-average original life (in years)	15			14			13
Balance as of December 31, 2011
Original cost	$	25,987		$	4,583		$	7,136		$	37,706
Accumulated amortization	(10,387		)	(1,209		)	(2,352		)	(13,948		)
Carrying amount	$	15,600		$	3,374		$	4,784		$	23,758
Weighted-average original life (in years)	14			14			13

The additions to Goodwill during 2011 were a result of our Water Star acquisition as well as recording a portion of the Shanghai ShenTan Mechanical and Electrical Equipment Co. Ltd. (“Shanghai ShenTan”) earn-out. The Water Star intangible asset consisted of technology with an estimated life of 15 years.

During the second quarter of 2011, we impaired customer lists and technology Intangible Assets totaling $1,805 related to the obsolescence of the two Hofmans outdoor city cleaning products in Europe. This impairment charge is included within Selling and Administrative Expense in the 2011 Consolidated Statement of Earnings.

Amortization expense on Intangible Assets was $2,800, $3,330 and $3,166 for the years ended December 31, 2012, 2011 and 2010, respectively.

Estimated aggregate amortization expense based on the current carrying amount of amortizable Intangible Assets for each of the five succeeding years is as follows:

2013	$	2,213
2014	2,178
2015	2,154
2016	2,141
2017	1,877
Thereafter	10,830
Total	$	21,393

8. Debt

Long-Term Debt as of December 31 consisted of the following:

	2012			2011
Long-Term Debt:
Bank borrowings	$	22		$	49
Credit facility borrowings	30,000			30,000
Notes Payable	750			1,500
Collateralized borrowings	39			127
Capital lease obligations	1,512			4,779
Total Long-Term Debt	32,323			36,455
Less: current portion	(2,042		)	(4,166		)
Long-term portion	$	30,281		$	32,289

As of December 31, 2012, we had committed lines of credit totaling approximately $125,000 and uncommitted lines of credit totaling approximately $87,640. There was $10,000 in outstanding borrowings under our JPMorgan facility and $20,000 borrowings under our Prudential facility as of December 31, 2012. In addition, we had stand alone letters of credit of approximately $2,014 outstanding and bank guarantees in the amount of approximately $498. Commitment fees on unused lines of credit for the year ended December 31, 2012 were $318.

28

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

Our most restrictive covenants are part of our Credit Agreement with JPMorgan, which are the same covenants in our Shelf Agreement with Prudential described below, and require us to maintain an indebtedness to EBITDA ratio of not greater than 3.00 to 1 and to maintain an EBITDA to interest expense ratio of no less than 3.50 to 1 as of the end of each quarter. As of December 31, 2012, our indebtedness to EBITDA ratio was 0.43 to 1 and our EBITDA to interest expense ratio was 32.96 to 1.

Credit Facilities

JPMorgan Chase Bank, National Association

On May 5, 2011, we entered into a Credit Agreement (the “2011 Credit Agreement”) with JPMorgan Chase Bank, N. A. (“JPMorgan”), as administrative agent and collateral agent, U.S. Bank National Association, as syndication agent, Wells Fargo Bank, National Association, and RBS Citizens, N.A., as co-documentation agents, and the Lenders (including JPMorgan) from time to time party thereto. Upon entry into the 2011 Credit Agreement, we repaid and terminated our June 19, 2007 Credit Agreement. The 2011 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior unsecured credit facility until May 5, 2016, in the amount of $125,000, with an option to expand by up to $62,500 to a total of $187,500. Borrowings may be denominated in U.S. Dollars or certain other currencies. The 2011 Credit Agreement contains a $100,000 sublimit on borrowings by foreign subsidiaries.

The fee for committed funds under the 2011 Credit Agreement ranges from an annual rate of 0.25% to 0.40%, depending on our leverage ratio. Borrowings under the 2011 Credit Agreement bear interest at a rate per annum equal to the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50% and (c) the adjusted LIBOR rate for a one month period plus 1.0%, plus, in any such case, an additional spread of 0.50% to 1.10%, depending on our leverage ratio.

The 2011 Credit Agreement gives the lenders a pledge of 65% of the stock of certain first tier foreign subsidiaries. The obligations under the 2011 Credit Agreement are also guaranteed by our first tier domestic subsidiaries.

The 2011 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 2011 Credit Agreement contains the following covenants:

• a covenant requiring us to maintain an indebtedness to EBITDA ratio as of the end of each quarter of not greater than 3.00 to 1;

• a covenant requiring us to maintain an EBITDA to interest expense ratio as of the end of each quarter of no less than 3.50 to 1;

• a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50,000 to $75,000 during any fiscal year based on our leverage ratio after giving effect to such payments; and

• a covenant restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25,000.

As of December 31, 2012 we were in compliance with all covenants under the Credit Agreement. There was $10,000 in outstanding borrowings under this facility at December 31, 2012, with a weighted average interest rate of 1.72%.

Prudential Investment Management, Inc.

On May 5, 2011, we entered into Amendment No. 1 to our Private Shelf Agreement (the “Amendment”), which amends the Private Shelf Agreement, dated as of July 29, 2009, with Prudential Investment Management, Inc. (“Prudential”) and Prudential affiliates from time to time party thereto (the “Shelf Agreement”).

The Amendment principally provides the following changes to the Shelf Agreement:

• elimination of the security interest in our personal property and subsidiaries;

• an amendment to the maximum leverage ratio to not greater than 3.00 to 1 for any period ending on or after March 31, 2011;

• an amendment to our restriction regarding the payment of dividends or repurchase of stock to restrict us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50,000 to $75,000 during any fiscal year based on our leverage ratio after giving effect to such payments; and

• an amendment to Permitted Acquisitions restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25,000.

On July 24, 2012, we entered into Amendment No. 2 to our Private Shelf Agreement (“Amendment No. 2”), which amends the Shelf Agreement. The principal change effected by Amendment No. 2 is an extension of the Issuance Period for Shelf Notes under the Shelf Agreement. The Issuance Period now expires on July 24, 2015.

As of December 31, 2012, there was $20,000 in outstanding borrowings under this facility; the $10,000 Series A notes issued in March 2011 with a fixed interest rate of 4.00% and a 7 year term serially maturing from 2014 to 2018; and the $10,000 Series B notes issued in June 2011 with a fixed interest rate of 4.10% and a 10 year term serially maturing from 2015 to 2021. We were in compliance with all covenants of the Shelf Agreement as of December 31, 2012.

The Royal Bank of Scotland Citizens, N.A.

On September 14, 2010, we entered into an overdraft facility with The Royal Bank of Scotland Citizens, N.A. in the amount of 2,000 Euros or approximately $2,640. There was no balance outstanding on this facility as of December 31, 2012.

29

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

HSBC Bank (China) Company Limited, Shanghai Branch

On June 20, 2012, we entered into a banking facility with the HSBC Bank (China) Company Limited, Shanghai Branch in the amount of $5,000 for the purpose of issuing general bank guarantees. There was no balance outstanding on this facility as of December 31, 2012.

Notes Payable

On May 31, 2011, we incurred $1,500 in debt related to installment payments due to the former owners of Water Star in connection with our acquisition of Water Star, of which $750 remains outstanding as of December 31, 2012.

Collateralized Borrowings

Collateralized borrowings represent deferred sales proceeds on certain leasing transactions with third-party leasing companies. These transactions are accounted for as borrowings, with the related assets capitalized as property, plant and equipment and depreciated straight-line over the lease term.

Capital Lease Obligations

Capital lease obligations outstanding are primarily related to sale-leaseback transactions with third-party leasing companies whereby we sell our manufactured equipment to the leasing company and lease it back. The equipment covered by these leases is rented to our customers over the lease term.

The aggregate maturities of our outstanding debt including capital lease obligations as of December 31, 2012, are as follows:

2013	$	3,101
2014	3,221
2015	4,241
2016	14,002
2017	3,792
Thereafter	8,203
Total minimum obligations	$	36,560
Less: amount representing interest	(4,237		)
Total	$	32,323

9. Other Current Liabilities

Other Current Liabilities as of December 31, consisted of the following:

	2012		2011
Taxes, other than income taxes	$	4,768	$	5,629
Warranty	9,357		8,759
Deferred revenue	1,878		3,159
Rebates	6,983		5,185
Freight	3,999		3,945
Miscellaneous accrued expenses	8,115		8,974
Other	3,744		3,753
Total	$	38,844	$	39,404

The changes in warranty reserves for the three years ended December 31 were as follows:

	2012			2011			2010
Beginning balance	$	8,759		$	7,043		$	5,985
Product warranty provision	12,395			12,815			10,506
(Divested) acquired reserves	(236		)	10			—
Foreign currency	(15		)	(63		)	(88		)
Claims paid	(11,546		)	(11,046		)	(9,360		)
Ending balance	$	9,357		$	8,759		$	7,043

30

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

10. Fair Value Measurements

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 at December 31, 2012 is as follows:

	Fair Value		Level 1		Level 2		Level 3
Assets:
Foreign currency forward exchange contracts	$	388	$	—	$	388	$	—
Total Assets	$	388	$	—	$	388	$	—
Liabilities:
Foreign currency forward exchange contracts	$	404	$	—	$	404	$	—
Total Liabilities	$	404	$	—	$	404	$	—

Our foreign currency forward exchange contracts are valued based on quoted forward foreign exchange prices at the reporting date.

We use derivative instruments to manage exposures to foreign currency only in an attempt to limit underlying exposures from currency fluctuations and not for trading purposes. Gains or losses on forward foreign exchange contracts to economically hedge foreign currency-denominated assets and liabilities are recognized in Other Current Assets and Other Current Liabilities within the Consolidated Balance Sheets and are recognized in Other Income (Expense) under Net Foreign Currency Transaction Gains (Losses) within the Consolidated Statements of Earnings. As of December 31, 2012 the fair value of such contracts outstanding was an asset of $388 and a liability of $404. As of December 31, 2011 the fair value of such contracts outstanding was an asset of $1,015 and a liability of $102. We recognized a net gain of $1,026 during 2012, a net loss of $1,444 during 2011 and a net gain of $1,216 during 2010. At December 31, 2012 and 2011, the notional amounts of foreign currency forward exchange contracts outstanding were $42,475 and $45,524, respectively.

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.

The fair market value of our Long-Term Debt approximates cost, based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities.

11. Retirement Benefit Plans

Substantially all U.S. employees are covered by various retirement benefit plans, including defined benefit pension plans, post-retirement medical plans and defined contribution savings plans. Retirement benefits for eligible employees in foreign locations are funded principally through defined benefit plans, annuity or government programs. The total cost of benefits for our plans was $11,078, $11,131 and $11,231 in 2012, 2011 and 2010, respectively.

We have a qualified, funded defined benefit retirement plan (the “U.S. Pension Plan”) in the U.S. covering certain current and retired employees. Plan benefits are based on the years of service and compensation during the highest five consecutive years of service in the final ten years of employment. No new participants have entered the plan since 2000. The plan has approximately 447 participants including 102 active employees as of December 31, 2012.

We have a U.S. postretirement medical benefit plan (the “U.S. Retiree Plan”) to provide certain healthcare benefits for U.S. employees hired before January 1, 1999. Eligibility for those benefits is based upon a combination of years of service with Tennant and age upon retirement.

Our defined contribution savings plan (“401(k)”) covers substantially all U.S. employees. Under this plan, we match up to 3% of the employee’s compensation in stock or cash to be invested per their election. Historically, matching contributions have been primarily funded by our ESOP Plan. However, as of December 31, 2009, all shares have been allocated. Starting in 2010, the matching contributions to the 401(k) are funded with cash. 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 $6,226, $6,864 and $7,073 during 2012, 2011 and 2010, respectively.

We have a U.S. nonqualified supplemental benefit plan (the “U.S. Nonqualified Plan”) to provide additional retirement benefits for certain employees whose benefits under our 401(k) plan or U.S. Pension Plan are limited by either the Employee Retirement Income Security Act or the Internal Revenue Code.

We also have defined pension benefit plans in the United Kingdom and Germany (the “U.K. Pension Plan” and the “German Pension Plan”). The U.K. Pension Plan and German Pension Plan cover certain current and retired employees and both plans are closed to new participants.

31

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

On March 23, 2010, the Patient Protection and Affordable Care Act (the “PPACA”) was signed into law, and, on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (the “HCERA” and, together with PPACA, the “Acts”), which makes various amendments to certain aspects of the PPACA, was signed into law. The Acts effectively change the tax treatment of federal subsidies paid to sponsors of retiree health benefit plans that provide prescription drug benefits that are at least actuarially equivalent to the corresponding benefits provided under Medicare Part D. Under the Acts, an employer’s income tax deduction for the costs of providing Medicare Part D-equivalent prescription drug benefits to retirees will be reduced by the amount of the federal subsidy beginning in 2013. Under U.S. GAAP, any impact from a change in tax law must be recognized in earnings in the period enacted regardless of the effective date. The Acts did not have a material impact on our financial position or results of operations.

During 2012 we made a $15,000 discretionary contribution to the U.S. Pension Plan in addition to the minimum funding requirements for 2011 and 2012. We expect to contribute approximately $145 to our U.S. Nonqualified Plan, $904 to our U.S. Retiree Plan, $234 to our U.K. Pension Plan and $39 to our German Pension Plan in 2013. No contributions to the U.S. Pension Plan are expected to be required during 2013.

Weighted-average asset allocations by asset category of the U.S. and U.K. Pension Plans as of December 31, 2012 are as follows:

Asset Category	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	701	$	701	$	—	$	—
Equity Securities:
U.S. Small-Cap (1)	1,438		1,438		—		—
U.S. Mid-Cap (1)	2,266		2,266		—		—
International Small-Cap (2)	63		63		—		—
Mutual Funds:
Corporate Bonds	18,671		18,671		—		—
U.S. Large-Cap (3)	18,141		18,141		—		—
International Large-Cap (4)	5,662		5,662		—		—
Investment Account held by Pension Plan (5)	8,855		—		8,855		—
Total	$	55,797	$	46,942	$	8,855	$	—

(1) This category is comprised of actively managed domestic common stocks.

(2) This category is comprised of actively managed international common stocks.

(3) This category is comprised of funds not actively managed that track the S&P 500.

(4) This category is comprised of funds not actively managed that are invested in foreign and domestic equities.

(5) This category is comprised of foreign and domestic equities and foreign and domestic fixed interest assets.

The primary objective of our U.S. and U.K. Pension Plans is to meet retirement income commitments to plan participants at a reasonable cost to Tennant and to maintain a sound actuarially funded status. This objective is accomplished through growth of capital and safety of funds invested. The pension plan 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. The target allocation for the U.S. Pension Plan is 60% equity and 40% debt securities. Equity securities within the U.S. Pension Plan do not include any direct investments in Tennant Company Common Stock. The U.K. Pension Plan is invested in an insurance contract with underlying investments primarily in equity and fixed income securities. Our German Pension Plan is unfunded, which is customary in that country. The expected return on assets assumption on the investment portfolios for the pension and other postretirement benefit 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.

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

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Postretirement Medical Benefits
	2012		2011		2012		2011		2012		2011
Discount rate	3.79	%	4.39	%	4.41	%	4.94	%	3.27	%	4.20	%
Rate of compensation increase	3.00	%	3.00	%	4.50	%	4.60	%	—		—

32

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

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

	U.S. Pension Benefits						Non-U.S. Pension Benefits						Postretirement Medical Benefits
	2012		2011		2010		2012		2011		2010		2012		2011		2010
Discount rate	4.39	%	5.39	%	5.88	%	4.94	%	5.39	%	5.69	%	4.20	%	5.00	%	5.60	%
Expected long-term rate of return on plan assets	7.70	%	7.70	%	7.70	%	4.80	%	5.20	%	5.50	%	—		—		—
Rate of compensation increase	3.00	%	3.00	%	3.00	%	4.60	%	5.10	%	5.10	%	—		—		—

The discount rate is used to discount future benefit obligations back to today’s dollars. Our discount rates were determined based on high-quality fixed income investments. The resulting discount rates are consistent with the duration of plan liabilities. The Citigroup Above Median Yield Curve is used in determining the discount rate for the U.S. Plans.

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

	2012		2011
U.S. Pension Plans	$	46,907	$	42,909
U.K. Pension Plan	8,837		7,858
German Pension Plan	878		652

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

	U.S. Pension Plans				Non-U.S. Plans
	2012		2011		2012		2011
Projected benefit obligation	$	48,824	$	44,280	$	10,011	$	8,775
Accumulated benefit obligation	46,907		42,909		9,715		8,510
Fair value of plan assets	46,942		28,237		8,855		7,738

As of December 31, 2012 the U.S Nonqualified and the German Pension Plans had an accumulated benefit obligation in excess of plan assets. As of December 31, 2011, the U.S. Pension Plan, the U.S. Nonqualified, U.K. Pension and German Pension Plans had an accumulated benefit obligation in excess of plan assets.

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

	2012		2011
Healthcare cost trend rate assumption for the next year	9.17	%	10.14	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2031		2031

Assumed healthcare cost trend rates have a significant effect on the amounts reported for healthcare plans. To illustrate, a one-percentage-point change in assumed healthcare cost trends would have the following effects:

	1-Percentage- Point Decrease			1-Percentage- Point Increase
Effect on total of service and interest cost components	$	(54	)	$	61
Effect on postretirement benefit obligation	$	(1,076	)	$	1,227

33

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, 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:

	U.S. Pension Benefits						Non-U.S. Pension Benefits						Postretirement Medical Benefits
	2012			2011			2012			2011			2012			2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	44,280		$	38,885		$	8,775		$	8,394		$	13,708		$	13,423
Service cost	686			651			138			133			142			132
Interest cost	1,928			2,013			437			465			551			612
Plan participants' contributions	—			—			24			24			—			—
Plan amendments	—			233			—			—			—			—
Actuarial loss	3,893			4,216			595			40			926			72
Foreign exchange	—			—			411			(63		)	—			—
Benefits paid	(1,963		)	(1,718		)	(369		)	(218		)	(1,237		)	(531		)
Benefit obligation at end of year	$	48,824		$	44,280		$	10,011		$	8,775		$	14,090		$	13,708
Change in fair value of plan assets and net accrued liabilities:
Fair value of plan assets at beginning of year	$	28,237		$	29,483		$	7,738		$	6,917		$	—		$	—
Actual return on plan assets	3,818			357			738			715			—			—
Employer contributions	16,850			115			346			352			1,237			531
Plan participants' contributions	—			—			24			24			—			—
Foreign exchange	—			—			378			(52		)	—			—
Benefits paid	(1,963		)	(1,718		)	(369		)	(218		)	(1,237		)	(531		)
Fair value of plan assets at end of year	46,942			28,237			8,855			7,738			—			—
Funded status at end of year	$	(1,882	)	$	(16,043	)	$	(1,156	)	$	(1,037	)	$	(14,090	)	$	(13,708	)
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent Assets	$	698		$	—		$	—		$	—		$	—		$	—
Current liabilities	145			129			39			38			904			841
Noncurrent liabilities	2,435			15,914			1,117			999			13,186			12,867
Net accrued liability	$	1,882		$	16,043		$	1,156		$	1,037		$	14,090		$	13,708
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Prior service cost	$	224		$	606		$	—		$	—		$	(109	)	$	(689	)
Net actuarial loss	13,711			12,488			246			2			2,789			1,921
Accumulated other comprehensive income	$	13,935		$	13,094		$	246		$	2		$	2,680		$	1,232

The components of the net periodic benefit cost for the three years ended December 31, were as follows:

	U.S. Pension Benefits									Non-U.S. Pension Benefits									Postretirement Medical Benefits
	2012			2011			2010			2012			2011			2010			2012			2011			2010
Service cost	$	686		$	651		$	657		$	138		$	133		$	117		$	142		$	132		$	121
Interest cost	1,928			2,013			2,032			437			465			434			551			612			681
Expected return on plan assets	(2,279		)	(2,325		)	(2,340		)	(387		)	(376		)	(346		)	—			—			—
Amortization of net actuarial loss	1,131			27			22			—			—			—			57			—			—
Amortization of prior service cost	382			550			554			—			—			—			(580		)	(580		)	(579		)
Foreign currency	—			—			—			16			(18		)	(65		)	—			—			—
Net periodic benefit cost	$	1,848		$	916		$	925		$	204		$	204		$	140		$	170		$	164		$	223

34

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

The changes in accumulated other comprehensive income for the three years ended December 31, were as follows:

	U.S. Pension Benefits									Non-U.S. Pension Benefits							Postretirement Medical Benefits
	2012			2011			2010			2012		2011			2010		2012			2011		2010
Prior service cost	$	—		$	233		$	—		$	—	$	—		$	—	$	—		$	—	$	—
Net actuarial loss (gain)	2,355			6,184			573			244		(300		)	143		926			72		(892		)
Amortization of prior service cost	(382		)	(550		)	(554		)	—		—			—		580			580		580
Amortization of prior transition asset	—			—			—			—		—			—		—			—		—
Amortization of net actuarial (loss) gain	(1,132		)	(27		)	(22		)	—		—			—		(57		)	—		—
Total recognized in other comprehensive income	$	841		$	5,840		$	(3	)	$	244	$	(300	)	$	143	$	1,449		$	652	$	(312	)
Total recognized in net periodic benefit cost and other comprehensive income	$	2,689		$	6,756		$	922		$	448	$	(96	)	$	283	$	1,619		$	816	$	(89	)

The following benefit payments, which reflect expected future service, are expected to be paid for our U.S. and Non-U.S. plans:

	U.S. Pension Benefits		Non-U.S. Pension Benefits		Postretirement Medical Benefits
2013	$	1,813	$	211	$	904
2014	2,057		252		977
2015	2,373		257		1,070
2016	2,544		263		1,150
2017	2,683		304		1,188
2018 to 2022	14,864		1,966		5,575
Total	$	26,334	$	3,253	$	10,864

The following amounts are included in accumulated other comprehensive income as of December 31, 2012 and are expected to be recognized as components of net periodic benefit cost during 2013:

	Pension Benefits		Postretirement Medical Benefits
Net loss	$	1,754	$	200
Net prior service cost (credit)	73		(103		)

35

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

12. Shareholders' Equity

Authorized Shares

We are authorized to issue an aggregate of 61,000,000 shares; 60,000,000 are designated as Common Stock, having a par value of $0.375 per share, and 1,000,000 are designated as Preferred Stock, having a par value of $0.02 per share. The Board of Directors is authorized to establish one or more series of preferred stock, setting forth the designation of each such series, and fixing the relative rights and preferences of each such series.

Purchase Rights

On November 10, 2006, the Board of Directors approved a Rights Agreement and declared a dividend of one preferred share purchase right for each outstanding share of Common Stock. Each right entitles the registered holder to purchase from us one one-hundredth of a Series A Junior Participating Preferred Share of the par value of $0.02 per share at a price of $100 per one hundredth of a Preferred Share, subject to adjustment. The rights are not exercisable or transferable apart from the Common Stock until the earlier of: (i) the close of business on the fifteenth day following a public announcement that a person or group of affiliated or associated persons has become an “Acquiring Person” (i.e., has become, subject to certain exceptions, including for stock ownership by employee benefit plans, the beneficial owner of 20% or more of the outstanding Common Stock), or (ii) the close of business on the fifteenth day following the first public announcement of a tender offer or exchange offer the consummation of which would result in a person or group of affiliated or associated persons becoming, subject to certain exceptions, the beneficial owner of 20% or more of the outstanding Common Stock (or such later date as may be determined by our Board of Directors prior to a person or group of affiliated or associated persons becoming an Acquiring Person). After a person or group becomes an Acquiring Person, each holder of a Right (other than an Acquiring Person) will be able to exercise the right at the current exercise price of the Right and receive the number of shares of Common Stock having a market value of two times the exercise price of the right, or, depending upon the circumstances in which the rights became exercisable, the number of common shares of the acquiring company having a market value of two times the exercise price of the right. At no time do the rights have any voting power. We may redeem the rights for $0.001 per right at any time prior to a person or group acquiring 20% or more of the Common Stock. Under certain circumstances, the Board of Directors may exchange the rights for our Common Stock or reduce the 20% thresholds to not less than 10%. The rights will expire on December 26, 2016, unless extended or earlier redeemed or exchanged by us.

13. Commitments and Contingencies

We lease office and warehouse facilities, vehicles and office equipment under operating lease agreements, which include both monthly and longer-term arrangements. Leases with initial terms of one year or more expire at various dates through 2020 and generally provide for extension options. Rent expense under the leasing agreements (exclusive of real estate taxes, insurance and other expenses payable under the leases) amounted to $17,524, $17,375 and $16,215 in 2012, 2011 and 2010, respectively.

The minimum rentals for aggregate lease commitments as of December 31, 2012, were as follows:

2013	$	8,469
2014	4,252
2015	2,555
2016	1,247
2017	209
Thereafter	89
Total	$	16,821

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. The aggregate residual value at lease expiration of those leases is $11,334, of which we have guaranteed $7,231. As of December 31, 2012, we have recorded a liability for the estimated end-of-term loss related to this residual value guarantee of $536 for certain vehicles within our fleet. Our fleet also contains vehicles we estimate will settle at a gain. Gains on these vehicles will be recognized at the end of the lease term.

During the second quarter of 2012, we entered into a three year agreement with a supplier, commencing January 1, 2013, with a total commitment of $2,102 which is still outstanding as of December 31, 2012.

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.

36

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

14. Income Taxes

Income from continuing operations for the three years ended December 31, was as follows:

	2012		2011		2010
U.S. operations	$	47,220	$	40,282	$	26,297
Foreign operations	12,670		8,448		8,430
Total	$	59,890	$	48,730	$	34,727

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

	2012			2011			2010
Current:
Federal	$	8,158		$	10,321		$	6,756
Foreign	4,633			2,277			3,005
State	1,089			1,450			1,214
	$	13,880		$	14,048		$	10,975
Deferred:
Federal	$	4,423		$	2,330		$	(10,541	)
Foreign	(126		)	(203		)	(248		)
State	129			(158		)	(262		)
	$	4,426		$	1,969		$	(11,051	)
Total:
Federal	$	12,581		$	12,651		$	(3,785	)
Foreign	4,507			2,074			2,757
State	1,218			1,292			952
	$	18,306		$	16,017		$	(76	)

U.S. income taxes have not been provided on approximately $21,277 of undistributed earnings of non-U.S. subsidiaries. We do not have any plans to repatriate the undistributed earnings. Any repatriation from foreign subsidiaries that would result in incremental U.S. taxation is not being considered. It is management’s belief that reinvesting these earnings outside the U.S. is the most efficient use of capital.

We have Dutch and German tax loss carryforwards of approximately $10,136 and $15,292, respectively. If unutilized, the Dutch tax loss carryforward will expire after 9 years. The German tax loss carryforward has no expiration date. Because of the uncertainty regarding realization of the Dutch tax loss carryforward, a valuation allowance was established. This valuation allowance increased in 2012 due to results of operations.

We have foreign tax credit carryforwards of approximately $6,034. If unutilized, foreign tax credit carryforwards will expire in 2020. Based upon evaluation, as of December 31, 2012, no valuation allowance has been recorded. We have Dutch foreign tax credit carryforwards of $687. Because of the uncertainty regarding utilization of the Dutch foreign tax credit carryforward, a valuation allowance was established during 2012 that impacted Net Earnings by $687.

A valuation allowance for the remaining deferred tax assets is not required since it is more likely than not that they will be realized through carryback to taxable income in prior years, future reversals of existing taxable temporary differences and future taxable income.

Our effective income tax rate varied from the U.S. federal statutory tax rate for the three years ended December 31, was as follows:

	2012		2011		2010
Tax at statutory rate	35.0	%	35.0	%	35.0	%
Increases (decreases) in the tax rate from:
State and local taxes, net of federal benefit	1.0		2.0		0.7
Effect of foreign operations	(6.2	)	0.5		0.5
International restructuring	—		—		(31.4	)
Effect of changes in valuation allowances	2.3		—		0.1
Domestic production activities deduction	(1.5	)	(1.6	)	(3.0	)
Other, net	—		(3.0	)	(2.1	)
Effective income tax rate	30.6	%	32.9	%	(0.2	)%

37

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

Deferred tax assets and liabilities were comprised of the following as of December 31:

	2012			2011			2010
Deferred tax assets:
Inventories, principally due to additional costs inventoried for tax purposes and changes in inventory reserves	$	28		$	426		$	1,081
Employee wages and benefits, principally due to accruals for financial reporting purposes	18,608			20,910			17,948
Warranty reserves accrued for financial reporting purposes	2,641			2,625			2,175
Accounts receivable, principally due to allowance for doubtful accounts and tax accounting method for equipment rentals	1,540			1,464			1,252
Tax loss carryforwards	6,619			5,915			12,725
Valuation allowance	(4,719		)	(3,229		)	(9,170		)
Tax credit carryforwards	6,720			8,554			10,119
Other	2,329			1,777			1,937
Total deferred tax assets	$	33,766		$	38,442		$	38,067
Deferred tax liabilities:
Property, Plant and Equipment, principally due to differences in depreciation and related gains	$	7,945		$	9,167		$	8,562
Goodwill and Intangible Assets	6,818			7,093			8,390
Total deferred tax liabilities	$	14,763		$	16,260		$	16,952
Net deferred tax assets	$	19,003		$	22,182		$	21,115

The valuation allowance at December 31, 2012, principally applies to Dutch tax loss and tax credit carryforwards that, 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.

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

	2012			2011
Balance at January 1,	$	3,424		$	5,272
Decreases as a result of tax positions taken during a prior period	—			(765		)
Increases as a result of tax position taken during the current year	611			828
Decreases relating to settlements with taxing authorities	—			(193		)
Reductions as a result of a lapse of the applicable statute of limitations	(447		)	(1,551		)
Decreases as a result of foreign currency fluctuations	(108		)	(167		)
Balance at December 31,	$	3,480		$	3,424

Included in the balance of unrecognized tax benefits at December 31, 2012 and 2011 are potential benefits of $3,259 and $3,209, respectively, that if recognized, would affect the effective tax rate from continuing operations.

We recognize potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. In addition to the liability of $3,480 and $3,424 for unrecognized tax benefits as of December 31, 2012 and 2011 was approximately $462 and $427, respectively, for accrued interest and penalties. To the extent interest and penalties are not assessed with respect to uncertain tax positions, the amounts accrued will be revised and reflected as an adjustment to income tax expense.

We are subject to U.S. federal income tax as well as income tax of numerous state and foreign jurisdictions. We are generally no longer subject to U.S. federal tax examinations for taxable years before 2011 and with limited exceptions, state and foreign income tax examinations for taxable years before 2004.

The Internal Revenue Service completed its examination of the U.S. income tax returns for the years 2009 and 2010 during the third quarter of 2012. The IRS's adjustments to certain tax positions were not material and were fully reserved. We are currently undergoing income examinations in various state and foreign jurisdictions covering 2004 to 2010. Although the final outcome of these examinations cannot be currently determined, we believe that we have adequate reserves with respect to these examinations.

We do not anticipate that total unrecognized tax benefits will change significantly within the next 12 months.

38

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

15. Share-Based Compensation

We have five plans under which we have awarded share-based compensation grants: The 1995 Stock Incentive Plan (“1995 Plan”) and 1999 Amended and Restated Stock Incentive Plan (“1999 Plan”), which provided for share-based compensation grants to our executives and key employees, 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”) and the Amended and Restated 2010 Stock Incentive Plan (“2010 Plan”), which were adopted as a continuing step toward aggregating our equity compensation programs to reduce the complexity of our equity compensation programs.

The 1995 and 1997 Plans were terminated in 2006 and all remaining shares were transferred to the Amended and Restated 1999 Stock Incentive Plan as approved by the shareholders in 2006. Awards granted under the 1995 and 1997 Plans prior to 2006 that remain outstanding continue to be governed by the respective plan under which the grant was made. Upon approval of the 1999 Amended and Restated Stock Incentive Plan in 2006, we ceased making grants of future awards under these plans and subsequent grants of future awards were made from the 1999 Plan and governed by its terms.

The 2007 Plan terminated our rights to grant awards under the 1999 Plan except that the 1999 Plan will remain available for grants of reload options upon exercise of previously granted options with one-time reload features. We have not granted options with reload features since March 1, 2004. Awards previously granted under the 1999 Plan remain outstanding and continue to be governed by the terms of that plan.

The 2010 Plan, originally approved by our shareholders on April 28, 2010 and amended and restated by our shareholders on April 25, 2012, terminated our rights to grant awards under the 2007 Plan; however, any awards granted under the 2007 or 2010 Plans that do not result in the issuance of shares of Common Stock may again be used for an award under the 2010 Plan. A total of 1,500,000 shares were authorized for future awards under the 2010 Plan.

As of December 31, 2012, there were 788,264 shares reserved for issuance under the 1995 Plan, the 1997 Plan, the 1999 Plan and the 2007 Plan for outstanding compensation awards and 322,297 shares were available for issuance under the 2010 Plan for current and future equity awards. 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.

We recognized total Share-Based Compensation Expense of $9,092, $5,407 and $4,639, respectively, during the years ended 2012, 2011 and 2010. The total income tax benefit recognized in the income statement for share-based compensation arrangements during the years ended 2012, 2011 and 2010 was $2,047, $1,266 and $1,724, respectively.

Stock Option and Stock Appreciation Right Awards

We determined the fair value of our stock option awards using the Black-Scholes valuation model that uses the assumptions noted in the table below. The expected life selected for stock options granted during the year represents the period of time that the stock options are expected to be outstanding based on historical data of stock option holder exercise and termination behavior of similar grants. The risk-free interest rate for periods within the contractual life of the stock option is based on the U.S. 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 life of each stock option grant. Dividend yield is estimated over the expected life based on our dividend policy and historical dividends paid. We use historical data to estimate pre-vesting forfeiture rates and revise those estimates in subsequent periods if actual forfeitures differ from those estimates.

The following table illustrates the valuation assumptions used for the 2012, 2011 and 2010 grants:

	2012		2011		2010
Expected volatility	51 - 52%		49 - 50%		46 - 68%
Weighted-average expected volatility	52	%	49	%	46	%
Expected dividend yield	1.6 - 1.7%		1.7 - 1.8%		1.9 - 2.5%
Weighted-average expected dividend yield	1.7	%	1.8	%	2.4	%
Expected term, in years	0.2 - 6		6		1 - 6
Risk-free interest rate	0.1 - 1.1%		1.3 - 2.5%		0.4 - 2.9%

Employee stock option awards prior to 2005 include a reload feature for options granted to key employees. This feature allows employees to exercise options through a stock-for-stock exercise using mature shares, and employees are granted a new stock option (reload option) equal to the number of shares of Common Stock used to satisfy both the exercise price of the option and the minimum tax withholding requirements. The reload options granted have an exercise price equal to the fair market value of the Common Stock on the grant date. Stock options granted in conjunction with reloads vest immediately and have a term equal to the remaining life of the initial grant.

Beginning in 2004, new stock option awards granted vest one-third each year over a three year period and have a ten year contractual term. These grants do not contain a reload feature. Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period. Compensation expense is fully recognized for reload stock options as of the reload date.

In addition to stock options, we also occasionally grant cash-settled stock appreciation rights (“SARs”) to employees in certain foreign locations. There were no outstanding SARs as of December 31, 2012 and no SARs were granted during 2012, 2011 or 2010.

39

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

The following table summarizes the activity during the year ended December 31, 2012 for stock option and SARs awards:

	Shares		Weighted-Average Exercise Price
Outstanding at beginning of year	1,268,917		$	20.40
Granted	168,008		43.27
Exercised	(239,474	)	17.36
Forfeited	(6,030	)	36.06
Outstanding at end of year	1,191,421		$	24.16
Exercisable at end of year	844,679		$	18.92

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2012, 2011 and 2010 was $16.60, $16.67 and $9.62, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2012, 2011 and 2010 was $5,826, $5,600 and $5,235, respectively. The aggregate intrinsic value of options outstanding and exercisable at December 31, 2012 was $23,577 and $21,145, respectively. The weighted-average remaining contractual life for options outstanding and exercisable as of December 31, 2012, was 6 years and 6 years, respectively. As of December 31, 2012, there was unrecognized compensation cost for nonvested options and rights of $3,027 which is expected to be recognized over a weighted-average period of 1.3 years.

Restricted Share Awards

Restricted share awards for employees generally have a three year vesting period from the effective date of the grant. Restricted share awards to non-employee directors vest upon a change of control or upon termination of service as a director occurring at least six months after grant date of the award so long as termination is for one of the following reasons: death; disability; retirement in accordance with Company policy (e.g., age, term limits, etc.); resignation at request of Board (other than for gross misconduct); resignation following at least six months’ advance notice; failure to be renominated (unless due to unwillingness to serve) or reelected by shareholders; or removal by shareholders.

The following table summarizes the activity during the year ended December 31, 2012, for nonvested restricted share awards:

	Shares		Weighted-Average Grant Date Fair Value
Nonvested at beginning of year	150,081		$	26.39
Granted	38,901		42.54
Vested	(46,628	)	18.47
Forfeited	—		—
Nonvested at end of year	142,354		$	33.40

The total fair value of shares vested during the year ended December 31, 2012, 2011 and 2010 was $861, $650 and $284, respectively. As of December 31, 2012, there was $1,718 of total unrecognized compensation cost related to nonvested shares which is expected to be recognized over a weighted-average period of 2.2 years.

Performance Share Awards

We grant performance share awards to key employees as a part of our long-term management compensation program. These awards are earned based upon achievement of certain financial performance targets. We determine the fair value of these awards as of the date of grant and recognize the expense over a three year performance period.

The 2012 performance share award covers the three year performance period from the beginning of fiscal year 2012 to the end of fiscal year 2014. Performance shares are granted in restricted stock units. They are payable in stock and vest solely upon achievement of certain financial performance targets during this three year period.

The 2011 performance share award covers the three year performance period from the beginning of fiscal year 2011 to the end of fiscal year 2013. Performance shares are granted in restricted stock units. They are payable in stock and vest solely upon achievement of certain financial performance targets during this three year period.

The 2010 performance share award covers the three year performance period from the beginning of fiscal year 2010 to the end of fiscal year 2012. Performance shares are granted in restricted stock units. They are payable in cash and vest solely upon achievement of certain financial performance targets during this three year period.

In 2009, we granted a combination of stock options, restricted stock awards and restricted stock units payable in cash to key employees as part of our management compensation program and did not grant performance share awards. These stock options and restricted share awards vest over a three year period and do not contain a performance requirement.

40

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

For the year ended 2010, we did not recognize any expense for the 2008 performance share awards as we do not deem the achievement of the predetermined financial performance targets to be probable.

Share-Based Liabilities

As of December 31, 2012 and 2011, we had $3,650 and $2,530 in total share-based liabilities recorded on our Consolidated Balance Sheets, respectively. During the years ended December 31, 2012, 2011 and 2010 we paid out $2,212, $506 and $81 related to 2009, 2008 and 2007 share-based liability awards, respectively.

16. Earnings Per Share

The computations of Basic and Diluted Earnings per Share for the years ended December 31, were as follows:

	2012		2011		2010
Numerator:
Net Earnings	$	41,584	$	32,713	$	34,803
Denominator:
Basic - Weighted Average Shares Outstanding	18,544,896		18,832,693		18,805,494
Effect of dilutive securities:
Employee stock options	557,120		527,735		526,609
Diluted - Weighted Average Shares Outstanding	19,102,016		19,360,428		19,332,103
Basic Earnings per Share	$	2.24	$	1.74	$	1.85
Diluted Earnings per Share	$	2.18	$	1.69	$	1.80

Options to purchase 233,655, 123,292 and 264,447 shares of Common Stock were outstanding during 2012, 2011 and 2010, respectively, but were not included in the computation of diluted earnings per share. These exclusions are made if the exercise prices of these options are greater than the average market price of our Common Stock for the period, if the number of shares we can repurchase under the treasury stock method exceeds the weighted shares outstanding in the options, or if we have a net loss, as the effects are anti-dilutive.

17. Segment Reporting

We are organized into four operating segments: North America; Latin America; Europe, Middle East, Africa; and Asia Pacific. We combine our North America and Latin America operating segments into the “Americas” for reporting Net Sales by geographic area. 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 following table presents the Net Sales by operating segment for the years ended December 31:

	2012		2011		2010
Net Sales:
Americas	$	491,661	$	481,426	$	424,462
Europe, Middle East, Africa	166,208		188,338		172,619
Asia Pacific	81,111		84,234		70,586
Total	$	738,980	$	753,998	$	667,667

The following table presents long lived assets by operating segment as of December 31:

	2012		2011		2010
Long-lived assets:
Americas	$	99,666	$	98,855	$	98,258
Europe, Middle East, Africa	30,891		29,390		34,497
Asia Pacific	4,499		5,183		4,312
Total	$	135,056	$	133,428	$	137,067

41

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except shares and per share data)

Accounting policies of the operations in the various operating segments are the same as those described in Note 1 of the Consolidated Financial Statements. Net Sales are attributed to each operating segment based on the country from which the product is shipped and are net of intercompany sales. Information regarding sales to customers geographically located in the United States is provided in Item 1, Segment and Geographic Area Financial Information. No single customer represents more than 10% of our consolidated Net Sales. Long-lived assets consist of Property, Plant and Equipment, Goodwill, Intangible Assets and certain other assets.

The following table presents revenues for groups of similar products and services for the years ended December 31:

	2012		2011		2010
Net Sales:
Equipment	$	435,900	$	452,398	$	389,137
Parts and consumables	175,782		177,999		160,994
Service and other	106,048		100,650		96,828
Specialty surface coatings	21,250		22,951		20,708
Total	$	738,980	$	753,998	$	667,667

18. Consolidated Quarterly Data (Unaudited)

	2012
	Q1		Q2		Q3		Q4
Net Sales	$	173,712	$	199,493	$	178,268	$	187,507
Gross Profit	$	75,319	$	88,951	$	77,563	$	83,463
Net Earnings	$	5,324	$	13,671	$	8,745	$	13,844
Basic Earnings per Share	$	0.28	$	0.74	$	0.47	$	0.75
Diluted Earnings per Share	$	0.28	$	0.71	$	0.46	$	0.73

	2011
	Q1		Q2		Q3		Q4
Net Sales	$	172,591	$	201,259	$	186,990	$	193,158
Gross Profit	$	71,931	$	83,468	$	80,253	$	83,529
Net Earnings	$	5,866	$	5,855	$	9,728	$	11,264
Basic Earnings per Share	$	0.31	$	0.31	$	0.52	$	0.60
Diluted Earnings per Share	$	0.30	$	0.30	$	0.50	$	0.59

The summation of quarterly data may not equate to the calculation for the full fiscal year as quarterly calculations are performed on a discrete basis.

Regular quarterly dividends aggregated $0.69 per share in 2012, or $0.17 per share for the first three quarters of 2012 and $0.18 for the fourth quarter of 2012, and $0.68 per share in 2011, or $0.17 per quarter.

19. Related Party Transactions

On July 31, 2012, we entered into a share purchase agreement with M&F, as further discussed in Note 4. Two of the M&F shareholders are individuals who were employed by Tennant prior to the transaction date and are no longer employed by Tennant as of the transaction date.

Our May 31, 2011 acquisition of Water Star includes installment payments totaling $1,500 to the former owners of Water Star, as further discussed in Note 4. As of the acquisition date, the former owners of Water Star are current employees of Tennant.

On May 18, 2009, we announced an exclusive technology license agreement with Global Opportunities Investment Group, LLC. A current employee of Tennant owns a minority interest in Global Opportunities Investment Group, LLC. Royalties under this license agreement are not material to our financial position or results of operations.

During the first quarter of 2008, we acquired Sociedade Alfa Ltda. and entered into lease agreements for certain properties owned by or partially owned by the former owners of this entity. Some of these individuals are current employees of Tennant. Lease payments made under these lease agreements are not material to our financial position or results of operations.

42

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

None.

ITEM 9A – Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Principal Financial and Accounting Officer, have evaluated the effectiveness of our disclosure controls and procedures for the period ended December 31, 2012 (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and our Principal Financial and Accounting Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and our principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control

There were no significant changes in our internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal accounting and financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment under the framework in Internal Control – Integrated Framework (COSO), our management concluded that our internal control over financial reporting was effective as of December 31, 2012.

KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this annual report on Form 10-K and, as a part of this audit, has issued their report, included in Item 8, on the effectiveness of our internal control over financial reporting.

/s/ H. Chris Killingstad

H. Chris Killingstad

President and Chief Executive Officer

/s/ Thomas Paulson

Thomas Paulson

Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)

Attestation Report of Independent Registered Public Accounting Firm

The attestation report required under this item is contained in Item 8 of this Annual Report on Form 10-K.

ITEM 9B – Other Information

None.

PART III

ITEM 10 – Directors, Executive Officers and Corporate Governance

The sections entitled “Board of Directors Information” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our 2013 Proxy Statement are incorporated herein by reference.

The list below identifies those persons designated as executive officers of the Company, including their age, position with the Company and positions held by them during the past five or more years.

Thomas J. Dybsky, Vice President, Administration

Thomas J. Dybsky (63) joined the Company in September 1998 as Vice President of Human Resources and was named Vice President of Administration in 2004. From June 1995 to September 1998, he was Vice President/Senior Consultant for MDA Consulting.

Andrew J. Eckert, Vice President, The Americas

Andrew J. Eckert (49) joined the Company in 2002 as General Manager, North America. He was promoted to Vice President, North America Sales in 2005, assumed responsibility for North America Sales and Service in 2007 and now serves as Vice President, The Americas. From 2000 to 2002, he was the Senior Vice President of Operations at Storecast Merchandising Company, a national retail merchandising service contractor for the grocery industry. Prior to that, he was Director of Strategic Planning at General Mills and led the automation and cost-reduction efforts for U.S. trade promotional spending. He began his sales career in 1985 at General Mills in Houston, TX, and held a variety of increasing responsibilities including Customer Sales Manager for Fleming Companies and American Stores.

H. Chris Killingstad, President and Chief Executive Officer

H. Chris Killingstad (57) joined the Company in April 2002 as Vice President, North America and was named President and CEO in 2005. From 1990 to 2002, he was employed by The Pillsbury Company, a consumer foods manufacturer. From 1999 to 2002 he served as Senior Vice President and General Manager of Frozen Products for Pillsbury North America; from 1996 to 1999 he served as Regional Vice President and Managing Director of Pillsbury Europe, and from 1990 to 1996 was Regional Vice President of Haagen-Dazs Asia Pacific. He held the position of International Business Development Manager at PepsiCo Inc., from 1982-1990 and Financial Manager for General Electric, from 1978-1980.

Thomas Paulson, Vice President and Chief Financial Officer

Thomas Paulson (56) joined the Company in March 2006. Prior to joining Tennant, Paulson was Chief Financial Officer and Senior Vice President of Innovex from 2001 to 2006. Prior to joining Innovex, a manufacturer of electronic interconnect solutions, Paulson worked for The Pillsbury Company for over 19 years. Paulson became a Vice President at Pillsbury in 1995 and was the Vice President of Finance for the $4 billion North American Foods Division for over two years before joining Innovex.

43

Michael W. Schaefer, Vice President, Chief Technical Officer

Mike Schaefer (52) joined the Company in January 2008 as Vice President, Chief Technical Officer. From 2000 to January 2008, he was Vice President of Dispensing Systems, Lean Six Sigma and Quality at Ecolab, Inc., a provider of cleaning, sanitizing, food safety and infection prevention products and services, where he led R&D efforts for their equipment business, continuous improvement and standardization of R&D processes. Prior to that he held various management positions at Alticor Corporation and Kraft General Foods.

Don B. Westman, Vice President, Global Operations

Don B. Westman (59) joined the Company in November 2006 as Vice President, Global Operations. Prior to joining Tennant, he was Vice President of Operations – Pump Division for Pentair, Inc., a provider of products and services for the movement, treatment and storage of water, from 2005 to November 2006. From 2003 to 2005, he was Vice President of Operations – Pentair Water. From 1997 to 2003, Westman was Vice President of Operations for Hoffmans Enclosures, where he began in 1982 as a manufacturing engineering manager.

Heidi M. Wilson, Vice President, General Counsel and Secretary

Heidi M. Wilson (62) joined the Company in 2003 as Assistant General Counsel and Assistant Secretary and was named General Counsel in 2005. She was a partner with General Counsel Ltd. during 2003. From 1995 to 2001, she was Vice President, General Counsel and Secretary at Musicland Group, Inc. From 1993 to 1995, she was Senior Legal Counsel at Medtronic, Inc. Prior to that, she was a partner at Faegre & Benson L.L.P., a Minneapolis law firm, which she joined in 1976.

Richard H. Zay, Vice President, Global Marketing

Richard H. Zay (42) joined the Company in June 2010 as Vice President, Global Marketing. From 2006 to June 2010, he held various positions with Whirlpool Corporation, a manufacturer of major home appliances, most recently as General Manager, KitchenAid Brand. From 1993 to 2006, he held various positions with Maytag Corporation, including Vice President, Jenn-Air Brand, Director of Marketing, Maytag Brand, and Director of Cooking Category Management.

Business Ethics Guide

We have adopted the Tennant Company Business Ethics Guide, as amended by the Board of Directors for 2012, which applies to all of our employees, directors, consultants, agents and anyone else acting on our behalf. The Business Ethics Guide includes particular provisions applicable to our senior financial management, which includes our Chief Executive Officer, Chief Financial Officer, Controller and other employees performing similar functions. A copy of our Business Ethics Guide is available on the Investor Relations page of our website, www.tennantco.com, and a copy will be mailed upon request to Investor Relations, Tennant Company, P.O. Box 1452, Minneapolis, MN 55440-1452. We intend to post on our website any amendment to, or waiver from, a provision of our Business Ethics Guide that applies to our Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Controller and other persons performing similar functions promptly following the date of such amendment or waiver. In addition, we have also posted copies of our Corporate Governance Principles and the Charters for our Audit, Compensation, Governance and Executive Committees on our website.

ITEM 11 – Executive Compensation

The sections entitled “Director Compensation” and “Executive Compensation Information” in our 2013 Proxy Statement are incorporated herein by reference.

ITEM 12 – Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The sections entitled “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” in our 2013 Proxy Statement are incorporated herein by reference.

ITEM 13 – Certain Relationships and Related Transactions, and Director Independence

The sections entitled “Director Independence” and “Related Person Transaction Approval Policy” in our 2013 Proxy Statement are incorporated herein by reference.

ITEM 14 – Principal Accountant Fees and Services

The section entitled “Fees Paid to Independent Registered Public Accounting Firm” in our 2013 Proxy Statement is incorporated herein by reference.

44

PART IV

ITEM 15 – Exhibits, Financial Statement Schedules

A. The following documents are filed as a part of this report:

1. Financial Statements

Consolidated Financial Statements filed as part of this report are contained in Item 8 of this annual report on Form 10-K.

2. Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts

(In thousands)	2012			2011			2010
Allowance for Doubtful Accounts and Returns:
Balance at beginning of year	$	4,829		$	4,311		$	5,077
Charged to costs and expenses	1,427			1,888			1,403
Charged to other accounts (1)	35			(91		)	(200		)
Deductions (2)	(1,892		)	(1,279		)	(1,969		)
Balance at end of year	$	4,399		$	4,829		$	4,311
Inventory Reserves:
Balance at beginning of year	$	4,173		$	3,693		$	3,997
Charged to costs and expenses	2,178			4,212			3,462
Charged to other accounts (1)	(2		)	(102		)	(263		)
Deductions (3)	(2,625		)	(3,630		)	(3,503		)
Balance at end of year	$	3,724		$	4,173		$	3,693
Valuation Allowance for Deferred Tax Assets:
Balance at beginning of year	$	3,229		$	9,170		$	9,131
Charged to costs and expenses	687			—			—
Charged to other accounts (4)	803			(5,941		)	39
Balance at end of year	$	4,719		$	3,229		$	9,170

⁽¹⁾ Primarily includes impact from foreign currency fluctuations.

⁽²⁾ Includes accounts determined to be uncollectible and charged against reserves, net of collections on accounts previously charged against reserves.

⁽³⁾ Includes inventory identified as excess, slow moving or obsolete and charged against reserves.

⁽⁴⁾ Includes a valuation allowance decreased in 2011 due to results of operations and an intercompany transaction that had no impact on 2011 Net Earnings. Other years were primarily the impact from foreign currency fluctuations.

All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.

45

3. Exhibits

Item #	Description	Method of Filing
2.1	Share Purchase Agreement dated February 15, 2008 among the Sellers identified therein and Tennant Scotland Limited (excluding schedules and exhibits, which the Company agrees to furnish supplementally to the Securities and Exchange Commission upon request)	Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K dated February 29, 2008.
3i	Restated Articles of Incorporation	Incorporated by reference to Exhibit 3i to the Company’s report on Form 10-Q for the quarterly period ended June 30, 2006.
3ii	Certificate of Designation	Incorporated by reference to Exhibit 3.1 to the Company's Form 10-K for the year ended December 31, 2006.
3iii	Amended and Restated By-Laws	Incorporated by reference to Exhibit 3(iii) to the Company’s Form 8-K dated December 14, 2010.
4.1	Rights Agreement, dated as of November 10, 2006, between the Company and Wells Fargo Bank, N.A., as Rights Agent	Incorporated by reference to Exhibit 1 to Form 8-A dated November 14, 2006.
10.1	Tennant Company 1995 Stock Incentive Plan*	Incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement No. 33-62003, Form S-8, dated August 22, 1995.
10.2	Tennant Company Executive Nonqualified Deferred Compensation Plan, as restated effective January 1, 2009, as amended*	Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2012.
10.3	Form of Amended and Restated Management Agreement and Executive Employment Agreement*	Incorporated by reference to Exhibit 10.3 to the Company's Form 10-K for the year ended December 31, 2011.
10.4	Schedule of parties to Management and Executive Employment Agreement	Incorporated by reference to Exhibit 10.4 to the Company's Form 10-K for the year ended December 31, 2011.
10.5	Tennant Company Non-Employee Director Stock Option Plan (as amended and restated effective May 6, 2004)*	Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarterly period ended June 30, 2004.
10.6	Tennant Company Amended and Restated 1999 Stock Incentive Plan*	Incorporated by reference to Appendix A to the Company’s proxy statement for the 2006 Annual Meeting of Shareholders filed on March 15, 2006.
10.7	Long-Term Incentive Plan 2008*	Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarterly period ended March 31, 2008.
10.8	Tennant Company 2007 Stock Incentive Plan*	Incorporated by reference to Appendix A to the Company’s proxy statement for the 2007 Annual Meeting of Shareholders filed on March 15, 2007.
10.9	Credit Agreement dated as of May 5, 2011	Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended June 30, 2011.
10.10	Deferred Stock Unit Agreement (awards in and after 2008)*	Incorporated by reference to Exhibit 10.17 to the Company’s Form 10-K for the year ended December 31, 2007.
10.11	Tennant Company 2009 Short-Term Incentive Plan*	Incorporated by reference to Appendix A to the Company's Proxy statement for the 2008 Annual Meeting of Shareholders filed on March 14, 2008.
10.12	Private Shelf Agreement dated as of July 29, 2009	Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 30, 2009.
10.13	Amendment No. 1 to Private Shelf Agreement dated as of May 5, 2011	Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q for the quarter ended June 30, 2011.
10.14	Amendment No. 2 to Private Shelf Agreement dated as of July 24, 2012	Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K dated July 26, 2012.
10.15	Amended and Restated 2010 Stock Incentive Plan*	Incorporated by reference to Appendix A to the Company's Proxy Statement for the 2012 Annual Meeting of Shareholders filed on March 15, 2012.
21	Subsidiaries of the Registrant	Filed herewith electronically.
23.1	Consent of KPMG, LLP Independent Registered Public Accounting Firm	Filed herewith electronically.
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed herewith electronically.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	Filed herewith electronically.
32.1	Section 1350 Certification of Chief Executive Officer	Filed herewith electronically.
32.2	Section 1350 Certification of Chief Financial Officer	Filed herewith electronically.

46

101 The following financial information from Tennant Company’s annual report on Form 10-K for the period ended December 31, 2012, filed with the SEC on February 21, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Earnings for the years ended December 31, 2012, 2011 and 2010, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets as of December 31, 2012 and 2011, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010, (v) the Consolidated Statements of Shareholders' Equity for the years ended December 31, 2012, 2011, and 2010, and (vi) Notes to the Consolidated Financial Statements.** Filed herewith electronically.

* Management contract or compensatory plan or arrangement required to be filed as an exhibit to this annual report on Form 10-K.

** Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this annual report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filings.

47

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TENNANT COMPANY
By	/s/ H. Chris Killingstad
	H. Chris Killingstad President, CEO and Board of Directors
Date	February 21, 2013

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By	/s/ H. Chris Killingstad	By	/s/ David Mathieson
	H. Chris Killingstad President, CEO and Board of Directors		David Mathieson Board of Directors
Date	February 21, 2013	Date	February 21, 2013
By	/s/ Thomas Paulson	By	/s/ Donal L. Mulligan
	Thomas Paulson Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)		Donal L. Mulligan Board of Directors
Date	February 21, 2013	Date	February 21, 2013
By	/s/ Azita Arvani	By	/s/ Stephen G. Shank
	Azita Arvani Board of Directors		Stephen G. Shank Board of Directors
Date	February 21, 2013	Date	February 21, 2013
By	/s/ William F. Austen	By	/s/ Steven A. Sonnenberg
	William F. Austen Board of Directors		Steven A. Sonnenberg Board of Directors
Date	February 21, 2013	Date	February 21, 2013
By	/s/ Carol S. Eicher	By	/s/ David S. Wichmann
	Carol S. Eicher Board of Directors		David S. Wichmann Board of Directors
Date	February 21, 2013	Date	February 21, 2013
By	/s/ James T. Hale
	James T. Hale Board of Directors
Date	February 21, 2013

48

EX-21

Exhibit 21

Subsidiaries of the Registrant

Subsidiary	Jurisdiction of Organization
Applied Kehmaschinen GmbH	Federal Republic of Germany
Applied Sweepers Group Leasing (U.K.)	United Kingdom
Applied Sweepers Holdings. Limited	United Kingdom
Applied Sweepers International Limited	United Kingdom
Floorep Limited	United Kingdom
Hofmans Machinefabriek	Netherlands
Nobles Floor Machines Limited	United Kingdom
Recumbrimientos Tennant, S. de R.L. de C.V.	United Mexican States
Servicios Integrados Tennant, S.A. de C.V.	United Mexican States
Sociedade Alfa Ltda.	Federative Republic of Brazil
Tennant Asia Pacific Holdings Private Ltd.	Republic of Singapore
Tennant Australia Pty Limited	Australia
Tennant B.V.	Netherlands
Tennant Cleaning Systems and Equipment (Shanghai) Co., Ltd.	People’s Republic of China
Tennant Cleaning Systems India Private Limited	Republic of India
Tennant Company	Minnesota
Tennant Company Far East Headquarters PTE LTD	Republic of Singapore
Tennant Europe B.V.	Netherlands
Tennant Europe N.V.	Belgium
Tennant France S.A.	French Republic
Tennant GmbH & Co. KG	Federal Republic of Germany
Tennant Holding B.V.	Netherlands
Tennant Holdings LLC	Minnesota
Tennant International Holding B.V.	Netherlands
Tennant N.V.	Netherlands
Tennant Netherland Holding B.V.	Netherlands
Tennant New Zealand Ltd.	New Zealand
Tennant Portugal E. de L., S.U., L. da	Portuguese Republic
Tennant SA Holdings LLC	Minnesota
Tennant Sales & Service Canada ULC	British Columbia, Canada
Tennant Sales and Service Company	Minnesota
Tennant Sales and Service Scandinavia ApS	Kingdom of Denmark
Tennant Sales and Service Spain, S.A.	Kingdom of Spain
Tennant Scotland Limited	United Kingdom
Tennant Sverige AB	Kingdom of Sweden
Tennant UK Cleaning Solutions Limited	United Kingdom
Tennant UK Limited	United Kingdom
Tennant Uruguay S.A.	Eastern Republic of Uruguay
Tennant Ventas & Servicios de Mexico, S.A. de C.V.	United Mexican States
Tennant Verwaltungs-gesellschaft GmbH	Federal Republic of Germany
Walter-Broadley Machines Limited	United Kingdom
Walter-Broadley Limited	United Kingdom
Water Star, Inc.	Ohio

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Tennant Company:

We consent to the incorporation by reference in the registration statements (No. 333-62003, 333-28641, 333-73706, 333-51531, 333-157708, 333-142581, and 333-166342) on Form S-8 and (No. 333-160887) on Form S-3 of Tennant Company of our report dated February 21, 2013, with respect to the consolidated balance sheets of Tennant Company as of December 31, 2012 and 2011, and the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2012, and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of December 31, 2012, which report appears in the December 31, 2012 annual report on Form 10-K of Tennant Company.

/s/ KPMG LLP

Minneapolis, Minnesota

February 21, 2013

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, H. Chris Killingstad, certify that:

1. I have reviewed this annual report on Form 10-K of Tennant Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 21, 2013	/s/ H. Chris Killingstad
		H. Chris Killingstad President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Thomas Paulson, certify that:

1. I have reviewed this annual report on Form 10-K of Tennant Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 21, 2013	/s/ Thomas Paulson
		Thomas Paulson Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Tennant Company (the “Company”) on Form 10-K for the period ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, H. Chris Killingstad, President and Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 21, 2013	/s/ H. Chris Killingstad
		H. Chris Killingstad
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Tennant Company (the “Company”) on Form 10-K for the period ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Paulson, Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 21, 2013	/s/ Thomas Paulson
		Thomas Paulson
		Vice President and Chief Financial Officer

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Retirement Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2012

Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]

Weighted-average asset allocations by asset category of the U.S. and U.K. Pension Plans

Weighted-average asset allocations by asset category of the U.S. and U.K. Pension Plans as of December 31, 2012 are as follows:

Asset Category	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	701	$	701	$	—	$	—
Equity Securities:
U.S. Small-Cap (1)	1,438		1,438		—		—
U.S. Mid-Cap (1)	2,266		2,266		—		—
International Small-Cap (2)	63		63		—		—
Mutual Funds:
Corporate Bonds	18,671		18,671		—		—
U.S. Large-Cap (3)	18,141		18,141		—		—
International Large-Cap (4)	5,662		5,662		—		—
Investment Account held by Pension Plan (5)	8,855		—		8,855		—
Total	$	55,797	$	46,942	$	8,855	$	—

(1) This category is comprised of actively managed domestic common stocks.

(2) This category is comprised of actively managed international common stocks.

(3) This category is comprised of funds not actively managed that track the S&P 500.

(4) This category is comprised of funds not actively managed that are invested in foreign and domestic equities.

(5) This category is comprised of foreign and domestic equities and foreign and domestic fixed interest assets.

Weighted-average assumptions used to determine benefit obligations and net periodic benefit costs

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

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Postretirement Medical Benefits
	2012		2011		2012		2011		2012		2011
Discount rate	3.79	%	4.39	%	4.41	%	4.94	%	3.27	%	4.20	%
Rate of compensation increase	3.00	%	3.00	%	4.50	%	4.60	%	—		—

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

	U.S. Pension Benefits						Non-U.S. Pension Benefits						Postretirement Medical Benefits
	2012		2011		2010		2012		2011		2010		2012		2011		2010
Discount rate	4.39	%	5.39	%	5.88	%	4.94	%	5.39	%	5.69	%	4.20	%	5.00	%	5.60	%
Expected long-term rate of return on plan assets	7.70	%	7.70	%	7.70	%	4.80	%	5.20	%	5.50	%	—		—		—
Rate of compensation increase	3.00	%	3.00	%	3.00	%	4.60	%	5.10	%	5.10	%	—		—		—

Accumulated benefit obligations for all defined benefit plans

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

	2012		2011
U.S. Pension Plans	$	46,907	$	42,909
U.K. Pension Plan	8,837		7,858
German Pension Plan	878		652

Plans with accumulated benefit obligation in excess of plan assets

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

	U.S. Pension Plans				Non-U.S. Plans
	2012		2011		2012		2011
Projected benefit obligation	$	48,824	$	44,280	$	10,011	$	8,775
Accumulated benefit obligation	46,907		42,909		9,715		8,510
Fair value of plan assets	46,942		28,237		8,855		7,738

Assumed healthcare cost trend rates

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

	2012		2011
Healthcare cost trend rate assumption for the next year	9.17	%	10.14	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2031		2031

Effect of on-percentage-point change in assumed healthcare cost trends

To illustrate, a one-percentage-point change in assumed healthcare cost trends would have the following effects:

	1-Percentage- Point Decrease			1-Percentage- Point Increase
Effect on total of service and interest cost components	$	(54	)	$	61
Effect on postretirement benefit obligation	$	(1,076	)	$	1,227

Changes in benefit obligations and plan assets and funded status

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:

	U.S. Pension Benefits						Non-U.S. Pension Benefits						Postretirement Medical Benefits
	2012			2011			2012			2011			2012			2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	44,280		$	38,885		$	8,775		$	8,394		$	13,708		$	13,423
Service cost	686			651			138			133			142			132
Interest cost	1,928			2,013			437			465			551			612
Plan participants' contributions	—			—			24			24			—			—
Plan amendments	—			233			—			—			—			—
Actuarial loss	3,893			4,216			595			40			926			72
Foreign exchange	—			—			411			(63		)	—			—
Benefits paid	(1,963		)	(1,718		)	(369		)	(218		)	(1,237		)	(531		)
Benefit obligation at end of year	$	48,824		$	44,280		$	10,011		$	8,775		$	14,090		$	13,708
Change in fair value of plan assets and net accrued liabilities:
Fair value of plan assets at beginning of year	$	28,237		$	29,483		$	7,738		$	6,917		$	—		$	—
Actual return on plan assets	3,818			357			738			715			—			—
Employer contributions	16,850			115			346			352			1,237			531
Plan participants' contributions	—			—			24			24			—			—
Foreign exchange	—			—			378			(52		)	—			—
Benefits paid	(1,963		)	(1,718		)	(369		)	(218		)	(1,237		)	(531		)
Fair value of plan assets at end of year	46,942			28,237			8,855			7,738			—			—
Funded status at end of year	$	(1,882	)	$	(16,043	)	$	(1,156	)	$	(1,037	)	$	(14,090	)	$	(13,708	)
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent Assets	$	698		$	—		$	—		$	—		$	—		$	—
Current liabilities	145			129			39			38			904			841
Noncurrent liabilities	2,435			15,914			1,117			999			13,186			12,867
Net accrued liability	$	1,882		$	16,043		$	1,156		$	1,037		$	14,090		$	13,708
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Prior service cost	$	224		$	606		$	—		$	—		$	(109	)	$	(689	)
Net actuarial loss	13,711			12,488			246			2			2,789			1,921
Accumulated other comprehensive income	$	13,935		$	13,094		$	246		$	2		$	2,680		$	1,232

Components of the net periodic benefit cost

The components of the net periodic benefit cost for the three years ended December 31, were as follows:

	U.S. Pension Benefits									Non-U.S. Pension Benefits									Postretirement Medical Benefits
	2012			2011			2010			2012			2011			2010			2012			2011			2010
Service cost	$	686		$	651		$	657		$	138		$	133		$	117		$	142		$	132		$	121
Interest cost	1,928			2,013			2,032			437			465			434			551			612			681
Expected return on plan assets	(2,279		)	(2,325		)	(2,340		)	(387		)	(376		)	(346		)	—			—			—
Amortization of net actuarial loss	1,131			27			22			—			—			—			57			—			—
Amortization of prior service cost	382			550			554			—			—			—			(580		)	(580		)	(579		)
Foreign currency	—			—			—			16			(18		)	(65		)	—			—			—
Net periodic benefit cost	$	1,848		$	916		$	925		$	204		$	204		$	140		$	170		$	164		$	223

Changes in accumulated other comprehensive income

The changes in accumulated other comprehensive income for the three years ended December 31, were as follows:

	U.S. Pension Benefits									Non-U.S. Pension Benefits							Postretirement Medical Benefits
	2012			2011			2010			2012		2011			2010		2012			2011		2010
Prior service cost	$	—		$	233		$	—		$	—	$	—		$	—	$	—		$	—	$	—
Net actuarial loss (gain)	2,355			6,184			573			244		(300		)	143		926			72		(892		)
Amortization of prior service cost	(382		)	(550		)	(554		)	—		—			—		580			580		580
Amortization of prior transition asset	—			—			—			—		—			—		—			—		—
Amortization of net actuarial (loss) gain	(1,132		)	(27		)	(22		)	—		—			—		(57		)	—		—
Total recognized in other comprehensive income	$	841		$	5,840		$	(3	)	$	244	$	(300	)	$	143	$	1,449		$	652	$	(312	)
Total recognized in net periodic benefit cost and other comprehensive income	$	2,689		$	6,756		$	922		$	448	$	(96	)	$	283	$	1,619		$	816	$	(89	)

Expected future benefit payments

The following benefit payments, which reflect expected future service, are expected to be paid for our U.S. and Non-U.S. plans:

	U.S. Pension Benefits		Non-U.S. Pension Benefits		Postretirement Medical Benefits
2013	$	1,813	$	211	$	904
2014	2,057		252		977
2015	2,373		257		1,070
2016	2,544		263		1,150
2017	2,683		304		1,188
2018 to 2022	14,864		1,966		5,575
Total	$	26,334	$	3,253	$	10,864

Amounts in accumulated other comprehensive income to be recognized over next fiscal year

The following amounts are included in accumulated other comprehensive income as of December 31, 2012 and are expected to be recognized as components of net periodic benefit cost during 2013:

	Pension Benefits		Postretirement Medical Benefits
Net loss	$	1,754	$	200
Net prior service cost (credit)	73		(103		)

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Debt Line of Credit Facility (Details) In Thousands, unless otherwise specified		12 Months Ended
	Dec. 31, 2012 USD ($)	Dec. 31, 2012 JPMorgan Chase Bank, National Association USD ($)	Dec. 31, 2012 Amended Prudential Investment Management USD ($)	Dec. 31, 2012 Series A Notes USD ($)	Dec. 31, 2012 Series B Notes USD ($)	Dec. 31, 2012 Royal Bank of Scotland Citizens, N.A. USD ($)	Dec. 31, 2012 Royal Bank of Scotland Citizens, N.A. EUR (€)	Dec. 31, 2012 HSBC Bank (China) Company Limited, Shanghai Branch USD ($)
Line of Credit Facility
Expiration date		May 05, 2016	Jul. 24, 2015
Maximum borrowing capacity		$ 125,000				$ 2,640	€ 2,000	$ 5,000
Additional borrowing capacity available		62,500
Maximum borrowing capacity with additional borrowing		187,500
Sublimit on borrowings by foreign subsidiaries		100,000
Minimum commitment fee percentage		0.25%
Maximum commitment fee percentage		0.40%
Interest rate spread added to the federal funds rate		0.50%
Interest rate spread added to LIBOR rate for one month		1.00%
Minimum interest rate spread added to LIBOR rate		0.50%
Maximum interest rate spread added to LIBOR rate		1.10%
Percentage collateral in stocks		65.00%
Covenant restriction, Maximum indebtedness to EBITDA		3.00 to 1	3.00 to 1
Covenant restriction, Minimum EBITDA to interest expense		3.50 to 1
Covenant restriction, Maximum leverage after paying dividends or repuchasing stock		2.00 to 1	2.00 to 1
Restriction on dividends and repurchases of common stock, Minimum		50,000	50,000
Restriction on dividends and repurchases of common stock, Maximum		75,000	75,000
Covenant restriction, Maximum leverage after acquisitions		2.75 to 1	2.75 to 1
Covenant restriction, Maximum level that can be paid for acquisitions		25,000	25,000
Amount outstanding		10,000	20,000
Weighted average interest rate at end of period		1.72%
Face amount				10,000	10,000
Interest rate, Stated percentage				4.00%	4.10%
Payment Terms				7 year term	10 year term
Maturity date range, Start				Jan. 01, 2014	Jan. 01, 2015
Maturity date range, End				Jan. 01, 2018	Jan. 01, 2021
Original debt amount owed to previous owners of an acquired business	1,500
Amount Outstanding on notes payable to owners of acquired entity	$ 750

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Acquisitions (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	May 31, 2011
Business Acquisition
Business acquisition, effective date of acquisition	May 31, 2011
Business acquisition, cost of acquired entity, purchase price		$ 4,456
Payments to acquire businesses, gross	2,956
Number of installment payments to be paid	2
Amount of installment payments to be paid	750
Water Star, Inc.
Business Acquisition, Purchase Price Allocation
Current Assets		426
Property, Plant and Equipment, net		167
Identified Intangible Assets		3,800
Goodwill		472
Total Assets Acquired		4,865
Current Liabilities		409
Total Liabilities Assumed		409
Net Assets Acquired		$ 4,456

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Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Taxes, other than income taxes	$ 4,768	$ 5,629
Warranty	9,357	8,759
Deferred revenue	1,878	3,159
Rebates	6,983	5,185
Freight	3,999	3,945
Miscellaneous accrued expenses	8,115	8,974
Other	3,744	3,753
Total	38,844	39,404
Changes in warranty reserves
Beginning balance	8,759	7,043	5,985
Product warranty provision	12,395	12,815	10,506
(Divested) acquired reserves	(236)	10	0
Foreign currency	(15)	(63)	(88)
Claims paid	(11,546)	(11,046)	(9,360)
Ending balance	$ 9,357	$ 8,759	$ 7,043

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Summary of Significan Accounting Policies [Abstract]
Accumulated Other Comprehensive Loss, Foreign Currency Translation Adjustment, Net of Tax	$ 19,900	$ 20,286	$ 17,145
Restricted Cash	187	3,279
Property, Plant and Equipment
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	2,000,000
Machine warranty, range minimum (in years)	1
Machine warranty, range maximum (in years)	4
Advertising Costs	$ 6,466	$ 6,728	$ 5,516
Buildings and improvements
Property, Plant and Equipment
Property, Plant and Equipment, Useful life, Average (in years)	30
Property, Plant and Equipment, Other Types
Property, Plant and Equipment
Property, Plant and Equipment, Useful life, Minimum (in years)	3
Property, Plant and Equipment, Useful life, Maximum (in years)	15

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Inventories (Tables)

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

Inventories

Inventories as of December 31, consisted of the following:

	2012			2011
Inventories carried at LIFO:
Finished goods	$	33,546		$	32,648
Raw materials, production parts and work-in-process	14,291			16,611
LIFO reserve	(27,608		)	(27,926		)
Total LIFO inventories	20,229			21,333
Inventories carried at FIFO:
Finished goods	25,623			31,912
Raw materials, production parts and work-in-process	12,284			12,667
Total FIFO inventories	37,907			44,579
Total Inventories	$	58,136		$	65,912

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Retirement Benefit Plans Part 1 (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011	Dec. 31, 2010
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]
Total cost of benefit for U.S. and Non-U.S. Plans	$ 11,078		$ 11,131	$ 11,231
Maximum employer contribution to 401(k) Plan as a percentage of employee's compensation	3.00%
Minimum service period required to be eligible for profit sharing contribution to 401(k) plan (in years)	1
Expenses for 401(k) Plan	6,226		6,864	7,073
Mutual Funds - International Large Cap | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	5,662	[1]
Mutual Funds - International Large Cap | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	5,662	[1]
Mutual Funds - International Large Cap | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[1]
Mutual Funds - International Large Cap | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[1]
U.S. and U.K. Pension Plans | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	55,797
U.S. and U.K. Pension Plans | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	46,942
U.S. and U.K. Pension Plans | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	8,855
U.S. and U.K. Pension Plans | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0
U.S. and U.K. Pension Plans | Cash and Cash Equivalents | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	701
U.S. and U.K. Pension Plans | Cash and Cash Equivalents | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	701
U.S. and U.K. Pension Plans | Cash and Cash Equivalents | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0
U.S. and U.K. Pension Plans | Cash and Cash Equivalents | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0
U.S. and U.K. Pension Plans | Equity Securities - U.S. Small-Cap | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	1,438	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Small-Cap | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	1,438	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Small-Cap | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Small-Cap | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Mid-Cap | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	2,266	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Mid-Cap | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	2,266	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Mid-Cap | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[2]
U.S. and U.K. Pension Plans | Equity Securities - U.S. Mid-Cap | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[2]
U.S. and U.K. Pension Plans | Equity Securities - International Small-Cap | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	63	[3]
U.S. and U.K. Pension Plans | Equity Securities - International Small-Cap | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	63	[3]
U.S. and U.K. Pension Plans | Equity Securities - International Small-Cap | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[3]
U.S. and U.K. Pension Plans | Equity Securities - International Small-Cap | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[3]
U.S. and U.K. Pension Plans | Mutual Funds - Corporate Bonds | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	18,671
U.S. and U.K. Pension Plans | Mutual Funds - Corporate Bonds | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	18,671
U.S. and U.K. Pension Plans | Mutual Funds - Corporate Bonds | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0
U.S. and U.K. Pension Plans | Mutual Funds - Corporate Bonds | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0
U.S. and U.K. Pension Plans | Mutual Funds - U.S. Large-Cap | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	18,141	[4]
U.S. and U.K. Pension Plans | Mutual Funds - U.S. Large-Cap | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	18,141	[4]
U.S. and U.K. Pension Plans | Mutual Funds - U.S. Large-Cap | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[4]
U.S. and U.K. Pension Plans | Mutual Funds - U.S. Large-Cap | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[4]
U.S. and U.K. Pension Plans | Investment Account held by Pension Plan | Fair Value
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	8,855	[5]
U.S. and U.K. Pension Plans | Investment Account held by Pension Plan | Level 1
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	0	[5]
U.S. and U.K. Pension Plans | Investment Account held by Pension Plan | Level 2
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	8,855	[5]
U.S. and U.K. Pension Plans | Investment Account held by Pension Plan | Level 3
Fair Value of Plan Assets by Investment Type
Fair value of plan assets	$ 0	[5]

[1] This category is comprised of funds not actively managed that are invested in foreign and domestic equities.

[2] This category is comprised of actively managed domestic common stocks.

[3] This category is comprised of actively managed international common stocks.

[4] This category is comprised of funds not actively managed that track the S&P 500.

[5] This category is comprised of foreign and domestic equities and foreign and domestic fixed interest assets.

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Earnings Per Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Earnings Per Share

16. Earnings Per Share

The computations of Basic and Diluted Earnings per Share for the years ended December 31, were as follows:

	2012		2011		2010
Numerator:
Net Earnings	$	41,584	$	32,713	$	34,803
Denominator:
Basic - Weighted Average Shares Outstanding	18,544,896		18,832,693		18,805,494
Effect of dilutive securities:
Employee stock options	557,120		527,735		526,609
Diluted - Weighted Average Shares Outstanding	19,102,016		19,360,428		19,332,103
Basic Earnings per Share	$	2.24	$	1.74	$	1.85
Diluted Earnings per Share	$	2.18	$	1.69	$	1.80

Options to purchase 233,655, 123,292 and 264,447 shares of Common Stock were outstanding during 2012, 2011 and 2010, respectively, but were not included in the computation of diluted earnings per share. These exclusions are made if the exercise prices of these options are greater than the average market price of our Common Stock for the period, if the number of shares we can repurchase under the treasury stock method exceeds the weighted shares outstanding in the options, or if we have a net loss, as the effects are anti-dilutive.

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Inventories carried at LIFO:
Finished goods	$ 33,546	$ 32,648
Raw materials, production parts and work-in-process	14,291	16,611
LIFO Reserve	(27,608)	(27,926)
Total LIFO inventories	20,229	21,333
Inventories carried at FIFO:
Finished goods	25,623	31,912
Raw materials, production parts and work-in-process	12,284	12,667
Total FIFO inventories	37,907	44,579
Inventories	$ 58,136	$ 65,912

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Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Share-based Compensation [Abstract]

Assumption used for the grants

The following table illustrates the valuation assumptions used for the 2012, 2011 and 2010 grants:

	2012		2011		2010
Expected volatility	51 - 52%		49 - 50%		46 - 68%
Weighted-average expected volatility	52	%	49	%	46	%
Expected dividend yield	1.6 - 1.7%		1.7 - 1.8%		1.9 - 2.5%
Weighted-average expected dividend yield	1.7	%	1.8	%	2.4	%
Expected term, in years	0.2 - 6		6		1 - 6
Risk-free interest rate	0.1 - 1.1%		1.3 - 2.5%		0.4 - 2.9%

Stock options and SARs activity

The following table summarizes the activity during the year ended December 31, 2012 for stock option and SARs awards:

	Shares		Weighted-Average Exercise Price
Outstanding at beginning of year	1,268,917		$	20.40
Granted	168,008		43.27
Exercised	(239,474	)	17.36
Forfeited	(6,030	)	36.06
Outstanding at end of year	1,191,421		$	24.16
Exercisable at end of year	844,679		$	18.92

Nonvested restricted shares activity

The following table summarizes the activity during the year ended December 31, 2012, for nonvested restricted share awards:

	Shares		Weighted-Average Grant Date Fair Value
Nonvested at beginning of year	150,081		$	26.39
Granted	38,901		42.54
Vested	(46,628	)	18.47
Forfeited	—		—
Nonvested at end of year	142,354		$	33.40

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Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Other Liabilities, Current [Abstract]

Other Current Liabilities

Other Current Liabilities as of December 31, consisted of the following:

	2012		2011
Taxes, other than income taxes	$	4,768	$	5,629
Warranty	9,357		8,759
Deferred revenue	1,878		3,159
Rebates	6,983		5,185
Freight	3,999		3,945
Miscellaneous accrued expenses	8,115		8,974
Other	3,744		3,753
Total	$	38,844	$	39,404

Changes in warranty reserves

The changes in warranty reserves for the three years ended December 31 were as follows:

	2012			2011			2010
Beginning balance	$	8,759		$	7,043		$	5,985
Product warranty provision	12,395			12,815			10,506
(Divested) acquired reserves	(236		)	10			—
Foreign currency	(15		)	(63		)	(88		)
Claims paid	(11,546		)	(11,046		)	(9,360		)
Ending balance	$	9,357		$	8,759		$	7,043

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Goodwill, Gross
Balance, beginning of period	$ 66,523	$ 67,008
Additions		688
Foreign currency fluctuations	2,062	(1,173)
Balance, end of period	68,585	66,523	67,008
Accumulated Impairment Losses
Balance, beginning of period	(46,220)	(46,585)
Additions		0
Foreign currency fluctuations	(2,648)	365
Balance, end of period	(48,868)	(46,220)	(46,585)
Goodwill, Net
Balance, beginning of period	20,303	20,423
Additions		688
Foreign currency fluctuations	(586)	(808)
Balance, end of period	19,717	20,303	20,423
Original cost	35,671	37,706
Accumulated amortization	(14,278)	(13,948)
Intangible Assets, Net	21,393	23,758
Impairment of Intangible Assets		1,805
Amortization expense	2,800	3,330	3,166
Estimated aggregate amortization expense of Intangible Assets
2013	2,213
2014	2,178
2015	2,154
2016	2,141
2017	1,877
Thereafter	10,830
Total	21,393
Water Star, Inc.
Goodwill, Net
Weighted-average original life (in years)	15 years
Customer Lists and Service Contracts
Goodwill, Net
Original cost	23,817	25,987
Accumulated amortization	(9,907)	(10,387)
Intangible Assets, Net	13,910	15,600
Weighted-average original life (in years)	15 years	14 years
Trade Name
Goodwill, Net
Original cost	4,657	4,583
Accumulated amortization	(1,565)	(1,209)
Intangible Assets, Net	3,092	3,374
Weighted-average original life (in years)	14 years	14 years
Technology
Goodwill, Net
Original cost	7,197	7,136
Accumulated amortization	(2,806)	(2,352)
Intangible Assets, Net	$ 4,391	$ 4,784
Weighted-average original life (in years)	13 years	13 years

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Schedule II Valuation and Qualifying Accounts (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Allowance for Doubtful Accounts and Returns
Valuation and Qualifying Accounts Disclosure
Balance at beginning of year	$ 4,829		$ 4,311		$ 5,077
Charged to costs and expenses	1,427		1,888		1,403
Charged to other accounts	35	[1]	(91)	[1]	(200)	[1]
Deductions	(1,892)	[2]	(1,279)	[2]	(1,969)	[2]
Balance at end of year	4,399		4,829		4,311
Inventory Reserves
Valuation and Qualifying Accounts Disclosure
Balance at beginning of year	4,173		3,693		3,997
Charged to costs and expenses	2,178		4,212		3,462
Charged to other accounts	(2)	[1]	(102)	[1]	(263)	[1]
Deductions	(2,625)	[3]	(3,630)	[3]	(3,503)	[3]
Balance at end of year	3,724		4,173		3,693
Valuation Allowance of Deferred Tax Assets
Valuation and Qualifying Accounts Disclosure
Balance at beginning of year	3,229		9,170		9,131
Charged to costs and expenses	687		0		0
Charged to other accounts	803	[4]	(5,941)	[4]	39	[4]
Balance at end of year	$ 4,719		$ 3,229		$ 9,170

[1] Primarily includes impact from foreign currency fluctuations.

[2] Includes accounts determined to be uncollectible and charged against reserves, net of collections on accounts previously charged against reserves.

[3] Includes inventory identified as excess, slow moving or obsolete and charged against reserves.

[4] Includes a valuation allowance decreased in 2011 due to results of operations and an intercompany transaction that had no impact on 2011 Net Earnings. Other years were primarily the impact from foreign currency fluctuations.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income from continuing operations
U.S. operations	$ 47,220	$ 40,282	$ 26,297
Foreign operations	12,670	8,448	8,430
Profit Before Income Taxes	59,890	48,730	34,727
Current:
Federal	8,158	10,321	6,756
Foreign	4,633	2,277	3,005
State	1,089	1,450	1,214
Current Income Tax Expense	13,880	14,048	10,975
Deferred:
Federal	4,423	2,330	(10,541)
Foreign	(126)	(203)	(248)
State	129	(158)	(262)
Deferred Income Tax Expense (Benefit)	4,426	1,969	(11,051)
Total:
Federal	12,581	12,651	(3,785)
Foreign	4,507	2,074	2,757
State	1,218	1,292	952
Total Income Tax Expense (Benefit)	18,306	16,017	(76)
Undistributed earnings of non-U.S. subsidiaries	21,277
Operating loss carryforwards
Foreign tax credit carryforwards	6,034
Foreign tax credit carryforwards expiration	Jan. 01, 2020
Effective income tax rate reconciliation
Tax at statutory rate	35.00%	35.00%	35.00%
Increases (decreases) in the tax rate from:
State and local taxes, net of federal benefit	1.00%	2.00%	0.70%
Effect of foreign operations	(6.20%)	0.50%	0.50%
International restructuring	0.00%	0.00%	(31.40%)
Effect of changes in valuation allowances	2.30%	0.00%	0.10%
Domestic production activities deduction	(1.50%)	(1.60%)	(3.00%)
Other, net	0.00%	(3.00%)	(2.10%)
Effective income tax rate	30.60%	32.90%	(0.20%)
Deferred tax assets:
Inventories, principally due to additional costs inventoried for tax purposes and changes in inventory reserves	28	426	1,081
Employee wages and benefits, principally due to accruals for financial reporting purposes	18,608	20,910	17,948
Warranty reserves accrued for financial reporting purposes	2,641	2,625	2,175
Accounts receivable, principally due to allowance for doubtful accounts and tax accounting method for equipment rentals	1,540	1,464	1,252
Tax loss carryforwards	6,619	5,915	12,725
Valuation allowance	(4,719)	(3,229)	(9,170)
Tax credit carryforwards	6,720	8,554	10,119
Other	2,329	1,777	1,937
Total deferred tax assets	33,766	38,442	38,067
Deferred tax liabilities:
Property, Plant and Equipment, principally due to differences in depreciation and related gains	7,945	9,167	8,562
Goodwill and Intangible Assets	6,818	7,093	8,390
Total deferred tax liabilities	14,763	16,260	16,952
Net deferred tax assets	19,003	22,182	21,115
Reconciliation of unrecognized tax benefits
Balance at January 1,	3,424	5,272
Decreases as a result of tax positions taken during a prior period	0	(765)
Increases as a result of tax position taken during the current year	611	828
Decreases relating to settlements with taxing authorities	0	(193)
Reductions as a result of a lapse of the applicable statute of limitations	(447)	(1,551)
Decreases as a result of foreign currency fluctuations	(108)	(167)
Balance at December 31,	3,480	3,424	5,272
Unrecognized tax benefits that would impact the effective tax rate	3,259	3,209
Accrued interest and penalties	462	427
Dutch
Operating loss carryforwards
Tax loss carryforwards	10,136
Tax loss carryforwards expiration	9 years
Foreign tax credit carryforwards	687
German
Operating loss carryforwards
Tax loss carryforwards	$ 15,292

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Management Actions (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Severance, Early Retirement and Related Costs - 2010 Action
Reconciliation of restructuring liability
Balance, beginning of period	$ 106	$ 1,584
Restructuring action			1,671
Cash payments	(102)	(1,534)	(87)
Foreign currency adjustments	(4)	(54)
Change in estimate		110
Balance, end of period	0	106	1,584
Severence and Related Costs - 2012 Action
Reconciliation of restructuring liability
Restructuring action	760
Cash payments	(414)
Foreign currency adjustments	27
Balance, end of period	$ 373

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Consolidated Statements of Shareholders' Equity (Parenthetical) (Parentheticals) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Consoldiated Statement of Shareholders' Equity (Parenthetical)
Dividends paid per Commons Share (in dollars per share)	$ 0.69	$ 0.68	$ 0.59
Common Stock, authorized (in shares)	60,000,000	60,000,000	60,000,000

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Share-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Share-based Compensation Arrangement by Share-based Payment Award
Vesting period of new awards granted (in years)	3 years
Share-Based Compensation Information
Share-based Compensation Arrangement by Share-based Payment Award, Number of plans	5
Share-based compensation expense	$ 9,092	$ 5,407	$ 4,639
Tax benefit recognized for share-based compensation	2,047	1,266	1,724
Valuation assumptions used for the 2012, 2011 and 2010 grants
Expected volatility, minimum	51.00%	49.00%	46.00%
Expected volatiity, maximum	52.00%	50.00%	68.00%
Weighted-average expected volatility	52.00%	49.00%	46.00%
Expected dividend yield, minimum	1.60%	1.70%	1.90%
Expected dividend yield, maximum	1.70%	1.80%	2.50%
Weighted-average expected dividend yield	1.70%	1.80%	2.40%
Expected term, minimum (in years)	0.2	6	1
Expected term, maximum (in years)	6	6	6
Risk-free interest rate, minimum	0.10%	1.30%	0.40%
Risk-free interest rate, maximum	1.10%	2.50%	2.90%
2010 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares authorized for future awards (in shares)	1,500,000
Shares reserved for issuance (in shares)	322,000
All Plans Excluding 2010 Plan
Share-based Compensation Arrangement by Share-based Payment Award
Shares reserved for issuance (in shares)	788,264
Restricted Share Awards
Shares activity
Nonvested at beginning of year (in shares)	150,081
Granted (in shares)	38,901
Vested (in shares)	(46,628)
Forfeited (in shares)	0
Nonvested at end of year (in shares)	142,354	150,081
Weighted-Average Exercise Price
Nonvested at beginning of year (in dollars per share)	$ 26.39
Granted (in dollars per share)	$ 42.54
Vested (in dollars per share)	$ 18.47
Forfeited (in dollars per share)	$ 0.00
Nonvested at end of year (in dollars per share)	$ 33.40	$ 26.39
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Fair value of shares vested	861	650	284
Unrecognized compensation cost for nonvested options	1,718
Compensation cost not yet recognized, weighted-average period for recognition (in years)	2 years 2 months
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Ratio of new awards that vest each year	one-third
Vesting period of new awards granted (in years)	3 years
Contractual term of new awards (in years)	10
Shares activity
Outstanding at beginning of year (in shares)	1,268,917
Granted (in shares)	168,008
Exercised (in shares)	(239,474)
Forfeited (in shares)	(6,030)
Outstanding at end of year (in shares)	1,191,421	1,268,917
Exercisable at end of year (in shares)	844,679
Weighted-Average Exercise Price
Outstanding at beginning of year (in dollars per share)	$ 20.40
Granted (in dollars per share)	$ 43.27
Exercised (in dollars per share)	$ 17.36
Forfeited (in dollars per share)	$ 36.06
Outstanding at end of year (in dollars per share)	$ 24.16	$ 20.40
Exercisable at end of year	$ 18.92
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-average grant date fair value (in dollars per share)	$ 16.60	$ 16.67	$ 9.62
Total intrinsic value of stock options exercised	5,826	5,600	5,235
Aggregate intrinsic value of options outstanding	23,577
Aggregate intrinsic value of options exercisable	21,145
Weighted-average remaining contractual life for options outstanding (in years)	6 years
Weighted-average remaining contractual life for options exercisable (in years)	6 years
Unrecognized compensation cost for nonvested options	3,027
Compensation cost not yet recognized, weighted-average period for recognition (in years)	1 year 4 months
Share-Based Liabilties
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Total share-based liabilities	3,650	2,530
Amounts paid out related to share-based liability awards	$ 2,212	$ 506	$ 81

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Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The computations of Basic and Diluted Earnings per Share for the years ended December 31, were as follows:

	2012		2011		2010
Numerator:
Net Earnings	$	41,584	$	32,713	$	34,803
Denominator:
Basic - Weighted Average Shares Outstanding	18,544,896		18,832,693		18,805,494
Effect of dilutive securities:
Employee stock options	557,120		527,735		526,609
Diluted - Weighted Average Shares Outstanding	19,102,016		19,360,428		19,332,103
Basic Earnings per Share	$	2.24	$	1.74	$	1.85
Diluted Earnings per Share	$	2.18	$	1.69	$	1.80

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Schedule II Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2012

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

Schedule II - Valuation and Qualifying Accounts

(In thousands)	2012			2011			2010
Allowance for Doubtful Accounts and Returns:
Balance at beginning of year	$	4,829		$	4,311		$	5,077
Charged to costs and expenses	1,427			1,888			1,403
Charged to other accounts (1)	35			(91		)	(200		)
Deductions (2)	(1,892		)	(1,279		)	(1,969		)
Balance at end of year	$	4,399		$	4,829		$	4,311
Inventory Reserves:
Balance at beginning of year	$	4,173		$	3,693		$	3,997
Charged to costs and expenses	2,178			4,212			3,462
Charged to other accounts (1)	(2		)	(102		)	(263		)
Deductions (3)	(2,625		)	(3,630		)	(3,503		)
Balance at end of year	$	3,724		$	4,173		$	3,693
Valuation Allowance for Deferred Tax Assets:
Balance at beginning of year	$	3,229		$	9,170		$	9,131
Charged to costs and expenses	687			—			—
Charged to other accounts (4)	803			(5,941		)	39
Balance at end of year	$	4,719		$	3,229		$	9,170

⁽¹⁾ Primarily includes impact from foreign currency fluctuations.

⁽²⁾ Includes accounts determined to be uncollectible and charged against reserves, net of collections on accounts previously charged against reserves.

⁽³⁾ Includes inventory identified as excess, slow moving or obsolete and charged against reserves.

⁽⁴⁾ Includes a valuation allowance decreased in 2011 due to results of operations and an intercompany transaction that had no impact on 2011 Net Earnings. Other years were primarily the impact from foreign currency fluctuations.

All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

19. Related Party Transactions

On July 31, 2012, we entered into a share purchase agreement with M&F, as further discussed in Note 4. Two of the M&F shareholders are individuals who were employed by Tennant prior to the transaction date and are no longer employed by Tennant as of the transaction date.

Our May 31, 2011 acquisition of Water Star includes installment payments totaling $1,500 to the former owners of Water Star, as further discussed in Note 4. As of the acquisition date, the former owners of Water Star are current employees of Tennant.

On May 18, 2009, we announced an exclusive technology license agreement with Global Opportunities Investment Group, LLC. A current employee of Tennant owns a minority interest in Global Opportunities Investment Group, LLC. Royalties under this license agreement are not material to our financial position or results of operations.

During the first quarter of 2008, we acquired Sociedade Alfa Ltda. and entered into lease agreements for certain properties owned by or partially owned by the former owners of this entity. Some of these individuals are current employees of Tennant. Lease payments made under these lease agreements are not material to our financial position or results of operations.

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Assets:
Foreign currency forward exchange contracts		$ 1,015
Liabilities:
Foreign currency forward exchange contracts		102
Gain (Loss) on forward exchange contracts	1,026	(1,444)	1,216
Notional Amount of Foreign Currency Derivatives	42,475	45,524
Fair Value
Assets:
Foreign currency forward exchange contracts	388
Total Assets	388
Liabilities:
Foreign currency forward exchange contracts	404
Total Liabilities	404
Level 1
Assets:
Foreign currency forward exchange contracts	0
Total Assets	0
Liabilities:
Foreign currency forward exchange contracts	0
Total Liabilities	0
Level 2
Assets:
Foreign currency forward exchange contracts	388
Total Assets	388
Liabilities:
Foreign currency forward exchange contracts	404
Total Liabilities	404
Level 3
Assets:
Foreign currency forward exchange contracts	0
Total Assets	0
Liabilities:
Foreign currency forward exchange contracts	0
Total Liabilities	$ 0

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Net Sales by operating segment

The following table presents the Net Sales by operating segment for the years ended December 31:

	2012		2011		2010
Net Sales:
Americas	$	491,661	$	481,426	$	424,462
Europe, Middle East, Africa	166,208		188,338		172,619
Asia Pacific	81,111		84,234		70,586
Total	$	738,980	$	753,998	$	667,667

Long lived assets by operating segments

The following table presents long lived assets by operating segment as of December 31:

	2012		2011		2010
Long-lived assets:
Americas	$	99,666	$	98,855	$	98,258
Europe, Middle East, Africa	30,891		29,390		34,497
Asia Pacific	4,499		5,183		4,312
Total	$	135,056	$	133,428	$	137,067

Net Sales by groups of similar products and services

The following table presents revenues for groups of similar products and services for the years ended December 31:

	2012		2011		2010
Net Sales:
Equipment	$	435,900	$	452,398	$	389,137
Parts and consumables	175,782		177,999		160,994
Service and other	106,048		100,650		96,828
Specialty surface coatings	21,250		22,951		20,708
Total	$	738,980	$	753,998	$	667,667

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Summary of Significan Accounting Policies [Abstract]

Nature of Operations

Nature of Operations – Our primary business is designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. Our products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; chemical-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading floors and other surfaces. We sell our products through our direct sales and service organization and a network of authorized distributors worldwide. Geographically, our customers are located in North America, Latin America, Europe, the Middle East, Africa and Asia Pacific.

Consolidation

Consolidation – The Consolidated Financial Statements include the accounts of Tennant Company and its subsidiaries. All intercompany transactions and balances have been eliminated. In these Notes to the Consolidated Financial Statements, Tennant Company is referred to as “Tennant,” “we,” “us,” or “our.”

Translations of Non-U.S. Currency

Translation of Non-U.S. Currency – Foreign currency-denominated assets and liabilities have been translated to U.S. dollars at year-end exchange rates, while income and expense items are translated at average exchange rates prevailing during the year. Gains or losses resulting from translation are included as a separate component of Shareholders’ Equity. The balance of cumulative foreign currency translation adjustments recorded within Accumulated Other Comprehensive Loss as of December 31, 2012, 2011 and 2010 was a net loss of $19,900, $20,286 and $17,145, respectively. Translation adjustments are not adjusted for income taxes as substantially all translation adjustments relate to permanent investments in non-U.S. subsidiaries. Net Foreign Currency Transaction (Losses) Gains are included in Other Income (Expense)

Use of Estimates

Use of Estimates – In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. 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. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. A number of these factors include, among others, economic conditions, credit markets, foreign currency, commodity cost volatility and consumer spending and confidence, all of which have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual amounts could differ significantly from those estimated at the time the consolidated financial statements are prepared. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Cash and Cash Equivalents

Cash and Cash Equivalents – We consider all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents.

Restricted Cash

Restricted Cash – We have a total of $187 that serves as collateral backing certain bank guarantees and is therefore restricted. This money is invested in time deposits.

Receivables

Receivables – Credit is granted to our customers in the normal course of business. Receivables are recorded at original carrying value less reserves for estimated uncollectible accounts and sales returns. To assess the collectability of these receivables, we perform ongoing credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information becomes available. Our reserves are also based on amounts determined by using percentages applied to trade receivables. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. An account is considered past-due or delinquent when it has not been paid within the contractual terms. Uncollectible accounts are written off against the reserves when it is deemed that a customer account is uncollectible.

Inventories

Inventories – Inventories are valued at the lower of cost or market. 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.

Property, Plant and Equipment

Property, Plant and Equipment – Property, plant and equipment is carried at cost. Additions and improvements that extend the lives of the assets are capitalized while expenditures for repairs and maintenance are expensed as incurred. We generally depreciate buildings and improvements by the straight-line method over a life of 30 years. Other property, plant and equipment are generally depreciated using the straight-line method based on lives of 3 years to 15 years.

Goodwill

Goodwill – Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. We analyze Goodwill on an annual basis as of year end and when an event occurs or circumstances change that may reduce the fair value of one of our reporting units below its carrying amount. A goodwill impairment occurs if the carrying amount of a reporting unit’s goodwill exceeds its fair value. In assessing the recoverability of Goodwill, in 2011 we began using an analysis of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Prior to 2011, in assessing the recoverability of Goodwill, we used a discounted cash flow model to estimate the reporting unit’s fair value to compare to its carrying amount. Management used judgment to develop assumptions for the discounted cash flow model including forecasting revenues and margins, estimating capital expenditures, depreciation, amortization and discount rates.

Intangible Assets

Intangible Assets – Intangible Assets consist of definite lived customer lists, service contracts, an acquired trade name and technology. Intangible Assets with a definite life are amortized on a straight-line basis.

Impairment of Long-lived Assets

Impairment of Long-lived Assets – 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. If impaired, an impairment loss is recognized based on the excess of the carrying amount of the individual asset group over its fair value.

Purchases of Common Stock

Purchases of Common Stock – We repurchase our Common Stock under a 2011 and a 2012 repurchase program authorized by our Board of Directors. These programs allow us to repurchase up to 2,000,000 shares of our Common Stock. Upon repurchase, the par value is charged to Common Stock and the remaining purchase price is charged to Additional Paid-in Capital. If the amount of the remaining purchase price causes the Additional Paid-in Capital account to be in a debit position, this amount is then reclassified to Retained Earnings. Common Stock repurchased is included in shares authorized but is not included in shares outstanding.

Warranty

Warranty – We record a liability for estimated warranty claims at the time of sale. The amount of the liability is based on the trend in the historical ratio of claims to sales, the historical length of time between the sale and resulting warranty claim, new product introductions and other factors. In the event we determine that our current or future product repair and replacement costs exceed our estimates, an adjustment to these reserves would be charged to earnings in the period such determination is made. Warranty terms on machines range from one to four years.

Environmental

Environmental – We record a liability for environmental clean-up on an undiscounted basis when a loss is probable and can be reasonably estimated.

Pension and Profit Sharing Plans

Pension and Profit Sharing Plans – We have pension and/or profit sharing plans covering substantially all of our employees. Pension plan costs are accrued based on actuarial estimates with the required pension cost funded annually, as needed. No new participants have entered the pension plan since 2000.

Postretirement Benefits

Postretirement Benefits – We accrue and recognize the cost of retiree health benefits over the employees’ period of service based on actuarial estimates. Benefits are only available for for U.S. employees hired before January 1, 1999.

Derivative Financial Instruments

Derivative Financial Instruments – We use derivative instruments to manage exposures to foreign currency only in an attempt to limit underlying exposures from currency fluctuations and not for trading purposes. We periodically enter into various contracts, principally forward exchange contracts, to protect the value of certain of our foreign currency-denominated assets and liabilities (principally the Euro, Australian and Canadian dollars, British pound, Japanese yen, Chinese yuan and Brazilian real). We have elected not to apply hedge accounting treatment to these contracts as our contracts are for a short duration. These contracts are marked-to-market with the related asset or liability recorded in Other Current Assets or Other Current Liabilities, as applicable. The gains and losses on these contracts generally approximate changes in the value of the related assets and liabilities. Gains or losses on forward foreign exchange contracts to economically hedge foreign currency-denominated net assets and liabilities are recognized in Other Income (Expense) under Net Foreign Currency Transaction (Losses) Gains within the Consolidated Statements of Earnings.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition – We recognize revenue when persuasive evidence of an arrangement exists, title and risk of ownership have passed, the sales price is fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met at the time the product is shipped. Provisions for estimated returns, rebates and discounts are provided for at the time the related revenue is recognized. Freight revenue billed to customers is included in Net Sales and the related shipping expense is included in Cost of Sales. Service revenue is recognized in the period the service is performed or ratably over the period of the related service contract.

Customers may obtain financing through third-party leasing companies to assist in their acquisition of our equipment products. Certain lease transactions classified as operating leases contain retained ownership provisions or guarantees, which results in recognition of revenue over the lease term. As a result, we defer the sale of these transactions and record the sales proceeds as collateralized borrowings or deferred revenue. The underlying equipment relating to operating leases is depreciated on a straight-line basis, not to exceed the equipment’s estimated useful life.

Revenues from contracts with multiple element arrangements are recognized as each element is earned. We offer service contracts in conjunction with equipment sales in addition to selling equipment and service contracts separately. Sales proceeds related to service contracts are deferred if the proceeds are received in advance of the service and recognized ratably over the contract period.

Stock-based Compensation

Share-based Compensation – We account for employee share-based compensation using the fair value based method. Our share-based compensation plans are more fully described in Note 15 of the Consolidated Financial Statements.

Research and Development

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

Advertising Costs

Advertising Costs –We advertise products, technologies and solutions to customers and prospective customers through a variety of marketing campaign and promotional efforts. These efforts include tradeshows, online advertising, e-mail marketing, mailings, sponsorships and telemarketing. Advertising costs are expensed as incurred. In 2012, 2011 and 2010 such activities amounted to $6,466, $6,728 and $5,516, respectively.

Income Taxes

Income Taxes – Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the book and tax bases of existing assets and liabilities. A valuation allowance is provided when, in management’s judgment, it is more likely than not that some portion or all of the deferred tax asset will not be realized. We have established contingent tax liabilities using management’s best judgment. We follow guidance provided by ASC 740, Income Taxes, regarding uncertainty in income taxes, to record these contingent tax liabilities (refer to Note 14 of the Consolidated Financial Statements for additional information). We adjust these liabilities as facts and circumstances change. Interest Expense is recognized in the first period the interest would begin accruing. Penalties are recognized in the period we claim or expect to claim the position in our tax return. Interest and penalties expenses are classified as an income tax expense.

Sales Tax

Sales Tax –Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis.

Earnings per Share

Earnings per Share – Basic earnings per share is computed by dividing Net Earnings by the Weighted Average Shares Outstanding during the period. Diluted earnings per share assume conversion of potentially dilutive stock options and restricted share awards. Performance-based shares are included in the calculation of diluted earnings per share in the quarter in which the performance targets have been achieved.

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Management Actions (Tables)

12 Months Ended

Dec. 31, 2012

Restructuring and Related Activities [Abstract]

Reconciliation of beginning and ending liability blances - 2010 Action

A reconciliation of the beginning and ending liability balances is as follows:

	Severance, Early Retirement and Related Costs
2010 restructuring action	$	1,671
Cash payments	(87		)
December 31, 2010 balance	$	1,584
2011 utilization:
Cash payments	(1,534		)
Foreign currency adjustments	(54		)
Change in estimate	110
December 31, 2011 balance	$	106
2012 utilization:
Cash payments	(102		)
Foreign currency adjustments	(4		)
December 31, 2012 balance	$	—

Reconciliation of beginning and ending liability balances - 2012 Action

A reconciliation of the beginning and ending liability balances is as follows:

	Severance and Related Costs
2012 restructuring action	$	760
Cash payments	(414		)
Foreign currency adjustments	27
December 31, 2012 balance	$	373

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Consolidated Statements of Shareholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2009	$ 184,279	$ 7,032	$ 7,772	$ 192,584	$ (23,109)
Balance (in shares) at Dec. 31, 2009		18,750,828
Net Earnings	34,803	0	0	34,803	0
Other Comprehensive Income (Loss)	835	0	0	0	835
Issue Stock for Directors, Employee Benefit and Stock Plans	6,175	146	6,029	0	0
Issues Stock for Directors, Employee Benefit and Stock Plans (in shares)		388,015
Share-Based Compensation	2,651	0	2,651	0	0
Dividends paid	(11,181)	0	0	(11,181)	0
Tax Benefit on Stock Plans	1,724	0	1,724	0	0
Purchases of Common Stock	(3,153)	(38)	(7,300)	4,185	0
Purchases of Common Stock (in shares)		(100,000)
Balance at Dec. 31, 2010	216,133	7,140	10,876	220,391	(22,274)
Balance (in shares) at Dec. 31, 2010		19,038,843
Net Earnings	32,713	0	0	32,713	0
Other Comprehensive Income (Loss)	(6,963)	0	0	0	(6,963)
Issue Stock for Directors, Employee Benefit and Stock Plans	4,118	99	4,019	0	0
Issues Stock for Directors, Employee Benefit and Stock Plans (in shares)		265,401
Share-Based Compensation	4,041	0	4,041	0	0
Dividends paid	(12,852)	0	0	(12,852)	0
Tax Benefit on Stock Plans	1,265	0	1,265	0	0
Purchases of Common Stock	(17,603)	(176)	(5,119)	(12,308)	0
Purchases of Common Stock (in shares)		(469,304)
Balance at Dec. 31, 2011	220,852	7,063	15,082	227,944	(29,237)
Balance (in shares) at Dec. 31, 2011	18,834,940	18,834,940
Net Earnings	41,584	0	0	41,584	0
Other Comprehensive Income (Loss)	(1,096)	0	0	0	(1,096)
Issue Stock for Directors, Employee Benefit and Stock Plans	2,517	94	2,423	0	0
Issues Stock for Directors, Employee Benefit and Stock Plans (in shares)		250,850
Share-Based Compensation	7,310	0	7,310	0	0
Dividends paid	(12,817)	0	0	(12,817)	0
Tax Benefit on Stock Plans	2,047	0	2,047	0	0
Purchases of Common Stock	(25,343)	(233)	(4,464)	(20,646)	0
Purchases of Common Stock (in shares)		(621,340)
Balance at Dec. 31, 2012	$ 235,054	$ 6,924	$ 22,398	$ 236,065	$ (30,333)
Balance (in shares) at Dec. 31, 2012	18,464,450	18,464,450

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Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

Components of purchase price allocation of acquisition

The components of the purchase price of the business combination described above have been allocated as follows:

Current Assets	$	426
Property, Plant and Equipment, net	167
Identified Intangible Assets	3,800
Goodwill	472
Total Assets Acquired	4,865
Current Liabilities	409
Total Liabilities Assumed	409
Net Assets Acquired	$	4,456

Assets and liabilities transferred under the Share Purchase Agreement

The assets and liabilities transferred under the Share Purchase Agreement on the date of sale were as follows:

Accounts Receivable	$	4,398
Inventories	4,271
Other Current Assets	87
Current Assets	8,756
Property, Plant and Equipment, net	170
Total Assets Divested	8,926
Current Liabilities	1,121
Total Liabilities Divested	1,121
Net Assets Divested	$	7,805

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Minimum rentals for aggregate lease commitments

The minimum rentals for aggregate lease commitments as of December 31, 2012, were as follows:

2013	$	8,469
2014	4,252
2015	2,555
2016	1,247
2017	209
Thereafter	89
Total	$	16,821

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Debt (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument
Current Portion of Long-Term Debt	$ (2,042)	$ (4,166)
Long-Term Debt	30,281	32,289
Committed lines of credit	125,000
Uncommitted lines of credit	87,640
Letters of credit, Outstanding amount	2,014
Bank guarantees	498
Commitment fees on unused lines of credit	318
Indebtedness to EBITDA ratio	0.43 to 1
EBITDA to interest expense ratio	32.96 to 1
Aggregate maturities of outstanding debt including capital lease obligations
2013	3,101
2014	3,221
2015	4,241
2016	14,002
2017	3,792
Thereafter	8,203
Total minimum obligations	36,560
Less: amount representing interest	(4,237)
Total	32,323	36,455
Bank borrownings
Aggregate maturities of outstanding debt including capital lease obligations
Total	22	49
Credit facility borrowings
Aggregate maturities of outstanding debt including capital lease obligations
Total	30,000	30,000
Notes Payable
Aggregate maturities of outstanding debt including capital lease obligations
Total	750	1,500
Collateralized borrowings
Aggregate maturities of outstanding debt including capital lease obligations
Total	39	127
Capital lease obligations
Aggregate maturities of outstanding debt including capital lease obligations
Total	$ 1,512	$ 4,779

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Consolidated Statements of Earnings (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Consolidated Statements of Earnings [Abstract]
Net Sales	$ 738,980	$ 753,998	$ 667,667
Cost of Sales	413,684	434,817	383,341
Gross Profit	325,296	319,181	284,326
Operating Expense:
Research and Development Expense	29,263	27,911	25,957
Selling and Administrative Expense	234,114	241,625	221,235
Gain on Sale of Business	(784)	0	0
Total Operating Expense	262,593	269,536	247,192
Profit from Operations	62,703	49,645	37,134
Other Income (Expense):
Interest Income	1,069	752	133
Interest Expense	(2,517)	(2,238)	(1,619)
Net Foreign Currency Transaction (Losses) Gains	(1,403)	559	(902)
Other Income (Expense), Net	38	12	(19)
Total Other Expense, Net	(2,813)	(915)	(2,407)
Profit Before Income Taxes	59,890	48,730	34,727
Income Tax Expense (Benefit)	18,306	16,017	(76)
Net Earnings	$ 41,584	$ 32,713	$ 34,803
Net Earnings per Share:
Basic	$ 2.24	$ 1.74	$ 1.85
Diluted	$ 2.18	$ 1.69	$ 1.80
Weighted Average Shares Outstanding:
Basic (in shares)	18,544,896	18,832,693	18,805,494
Diluted (in shares)	19,102,016	19,360,428	19,332,103
Cash Dividends Declared per Common Share	$ 0.69	$ 0.68	$ 0.59

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Consolidated Quarterly Data (Tables)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Information Disclosure [Abstract]

Consolidated quarterly data

18. Consolidated Quarterly Data (Unaudited)

	2012
	Q1		Q2		Q3		Q4
Net Sales	$	173,712	$	199,493	$	178,268	$	187,507
Gross Profit	$	75,319	$	88,951	$	77,563	$	83,463
Net Earnings	$	5,324	$	13,671	$	8,745	$	13,844
Basic Earnings per Share	$	0.28	$	0.74	$	0.47	$	0.75
Diluted Earnings per Share	$	0.28	$	0.71	$	0.46	$	0.73

	2011
	Q1		Q2		Q3		Q4
Net Sales	$	172,591	$	201,259	$	186,990	$	193,158
Gross Profit	$	71,931	$	83,468	$	80,253	$	83,529
Net Earnings	$	5,866	$	5,855	$	9,728	$	11,264
Basic Earnings per Share	$	0.31	$	0.31	$	0.52	$	0.60
Diluted Earnings per Share	$	0.30	$	0.30	$	0.50	$	0.59

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Consolidated Balance Sheets (Parenthetical) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Current Assets:
Accounts Receivable, Allowances	$ 4,399	$ 4,828
Shareholders' Equity:
Preferred Stock, par value (in dollars per share)	$ 0.02	$ 0.02
Preferred Stock, authorized (in shares)	1,000,000	1,000,000
Preferred Stock, issued (in shares)	0	0
Preferred Stock, outstanding (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 0.375	$ 0.375
Common Stock, authorized (in shares)	60,000,000	60,000,000
Common Stock, issued (in shares)	18,464,450	18,834,940
Common Stock, outstanding (in shares)	18,464,450	18,834,940

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Shareholders' Equity (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Stockholders' Equity Note [Abstract]
Number of shares authorized for issue (in shares)	61,000,000
Common Stock, authorized (in shares)	60,000,000	60,000,000	60,000,000
Common Stock, par value (in dollars per share)	$ 0.375	$ 0.375
Preferred Stock, authorized (in shares)	1,000,000	1,000,000
Preferred Stock, par value (in dollars per share)	$ 0.02	$ 0.02
Class of Warrant or Right
Preferred Share purchase rights expiration date	Dec. 26, 2016
Purchase Rights
Class of Warrant or Right
Preferred Share purchase right dividend declared per common share outstanding (in shares)	1.00
Exercise price per each Series A Junior Participating Preferred Stock (in dollars per share)	$ 100
Number of Series A Junior Participating Preferred shares the Rights holder is entitled to purchase (in shares)	0.01
Maximum threshold of common stock ownership	20.00%
Redemption price per right	$ 0.001
Minimum threshold of common stock ownership	10.00%

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in the carrying amount of Goodwill

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

	Goodwill			Accumulated Impairment Losses			Total
Balance as of December 31, 2011	$	66,523		$	(46,220	)	$	20,303
Foreign currency fluctuations	2,062			(2,648		)	(586		)
Balance as of December 31, 2012	$	68,585		$	(48,868	)	$	19,717
Balance as of December 31, 2010	$	67,008		$	(46,585	)	$	20,423
Additions	688			—			688
Foreign currency fluctuations	(1,173		)	365			(808		)
Balance as of December 31, 2011	$	66,523		$	(46,220	)	$	20,303

Acquired Intangible Assets excluding Goodwill

The balances of acquired Intangible Assets, excluding Goodwill, as of December 31, are as follows:

	Customer Lists and Service Contracts			Trade Name			Technology			Total
Balance as of December 31, 2012
Original cost	$	23,817		$	4,657		$	7,197		$	35,671
Accumulated amortization	(9,907		)	(1,565		)	(2,806		)	(14,278		)
Carrying amount	$	13,910		$	3,092		$	4,391		$	21,393
Weighted-average original life (in years)	15			14			13
Balance as of December 31, 2011
Original cost	$	25,987		$	4,583		$	7,136		$	37,706
Accumulated amortization	(10,387		)	(1,209		)	(2,352		)	(13,948		)
Carrying amount	$	15,600		$	3,374		$	4,784		$	23,758
Weighted-average original life (in years)	14			14			13

Estimated aggregate amortization expense of Intangible Assets

Estimated aggregate amortization expense based on the current carrying amount of amortizable Intangible Assets for each of the five succeeding years is as follows:

2013	$	2,213
2014	2,178
2015	2,154
2016	2,141
2017	1,877
Thereafter	10,830
Total	$	21,393

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Consolidated Quarterly Data (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Quarterly financial data
Net Sales	$ 187,507	$ 178,268	$ 199,493	$ 173,712	$ 193,158	$ 186,990	$ 201,259	$ 172,591	$ 738,980	$ 753,998	$ 667,667
Gross Profit	83,463	77,563	88,951	75,319	83,529	80,253	83,468	71,931	325,296	319,181	284,326
Net Earnings	$ 13,844	$ 8,745	$ 13,671	$ 5,324	$ 11,264	$ 9,728	$ 5,855	$ 5,866	$ 41,584	$ 32,713	$ 34,803
Earnings Per Share, Basic	$ 0.75	$ 0.47	$ 0.74	$ 0.28	$ 0.60	$ 0.52	$ 0.31	$ 0.31	$ 2.24	$ 1.74	$ 1.85
Earnings Per Share, Diluted	$ 0.73	$ 0.46	$ 0.71	$ 0.28	$ 0.59	$ 0.50	$ 0.30	$ 0.30	$ 2.18	$ 1.69	$ 1.80
Cash Dividends Declared per Common Share	$ 0.18	$ 0.17	$ 0.17	$ 0.17	$ 0.17	$ 0.17	$ 0.17	$ 0.17	$ 0.69	$ 0.68	$ 0.59

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

We lease office and warehouse facilities, vehicles and office equipment under operating lease agreements, which include both monthly and longer-term arrangements. Leases with initial terms of one year or more expire at various dates through 2020 and generally provide for extension options. Rent expense under the leasing agreements (exclusive of real estate taxes, insurance and other expenses payable under the leases) amounted to $17,524, $17,375 and $16,215 in 2012, 2011 and 2010, respectively.

The minimum rentals for aggregate lease commitments as of December 31, 2012, were as follows:

2013	$	8,469
2014	4,252
2015	2,555
2016	1,247
2017	209
Thereafter	89
Total	$	16,821

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. The aggregate residual value at lease expiration of those leases is $11,334, of which we have guaranteed $7,231. As of December 31, 2012, we have recorded a liability for the estimated end-of-term loss related to this residual value guarantee of $536 for certain vehicles within our fleet. Our fleet also contains vehicles we estimate will settle at a gain. Gains on these vehicles will be recognized at the end of the lease term.

During the second quarter of 2012, we entered into a three year agreement with a supplier, commencing January 1, 2013, with a total commitment of $2,102 which is still outstanding as of December 31, 2012.

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.

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Debt (Tables)

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Short-term and Long-term Debt

Long-Term Debt as of December 31 consisted of the following:

	2012			2011
Long-Term Debt:
Bank borrowings	$	22		$	49
Credit facility borrowings	30,000			30,000
Notes Payable	750			1,500
Collateralized borrowings	39			127
Capital lease obligations	1,512			4,779
Total Long-Term Debt	32,323			36,455
Less: current portion	(2,042		)	(4,166		)
Long-term portion	$	30,281		$	32,289

Aggregate maturities of outstanding debt including capital lease obligations

The aggregate maturities of our outstanding debt including capital lease obligations as of December 31, 2012, are as follows:

2013	$	3,101
2014	3,221
2015	4,241
2016	14,002
2017	3,792
Thereafter	8,203
Total minimum obligations	$	36,560
Less: amount representing interest	(4,237		)
Total	$	32,323

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Share-Based Compensation

12 Months Ended

Dec. 31, 2012

Share-based Compensation [Abstract]

Share-Based Compensation

15. Share-Based Compensation

We have five plans under which we have awarded share-based compensation grants: The 1995 Stock Incentive Plan (“1995 Plan”) and 1999 Amended and Restated Stock Incentive Plan (“1999 Plan”), which provided for share-based compensation grants to our executives and key employees, 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”) and the Amended and Restated 2010 Stock Incentive Plan (“2010 Plan”), which were adopted as a continuing step toward aggregating our equity compensation programs to reduce the complexity of our equity compensation programs.

The 1995 and 1997 Plans were terminated in 2006 and all remaining shares were transferred to the Amended and Restated 1999 Stock Incentive Plan as approved by the shareholders in 2006. Awards granted under the 1995 and 1997 Plans prior to 2006 that remain outstanding continue to be governed by the respective plan under which the grant was made. Upon approval of the 1999 Amended and Restated Stock Incentive Plan in 2006, we ceased making grants of future awards under these plans and subsequent grants of future awards were made from the 1999 Plan and governed by its terms.

The 2007 Plan terminated our rights to grant awards under the 1999 Plan except that the 1999 Plan will remain available for grants of reload options upon exercise of previously granted options with one-time reload features. We have not granted options with reload features since March 1, 2004. Awards previously granted under the 1999 Plan remain outstanding and continue to be governed by the terms of that plan.

The 2010 Plan, originally approved by our shareholders on April 28, 2010 and amended and restated by our shareholders on April 25, 2012, terminated our rights to grant awards under the 2007 Plan; however, any awards granted under the 2007 or 2010 Plans that do not result in the issuance of shares of Common Stock may again be used for an award under the 2010 Plan. A total of 1,500,000 shares were authorized for future awards under the 2010 Plan.

As of December 31, 2012, there were 788,264 shares reserved for issuance under the 1995 Plan, the 1997 Plan, the 1999 Plan and the 2007 Plan for outstanding compensation awards and 322,297 shares were available for issuance under the 2010 Plan for current and future equity awards. 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.

We recognized total Share-Based Compensation Expense of $9,092, $5,407 and $4,639, respectively, during the years ended 2012, 2011 and 2010. The total income tax benefit recognized in the income statement for share-based compensation arrangements during the years ended 2012, 2011 and 2010 was $2,047, $1,266 and $1,724, respectively.

Stock Option and Stock Appreciation Right Awards

We determined the fair value of our stock option awards using the Black-Scholes valuation model that uses the assumptions noted in the table below. The expected life selected for stock options granted during the year represents the period of time that the stock options are expected to be outstanding based on historical data of stock option holder exercise and termination behavior of similar grants. The risk-free interest rate for periods within the contractual life of the stock option is based on the U.S. 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 life of each stock option grant. Dividend yield is estimated over the expected life based on our dividend policy and historical dividends paid. We use historical data to estimate pre-vesting forfeiture rates and revise those estimates in subsequent periods if actual forfeitures differ from those estimates.

The following table illustrates the valuation assumptions used for the 2012, 2011 and 2010 grants:

	2012		2011		2010
Expected volatility	51 - 52%		49 - 50%		46 - 68%
Weighted-average expected volatility	52	%	49	%	46	%
Expected dividend yield	1.6 - 1.7%		1.7 - 1.8%		1.9 - 2.5%
Weighted-average expected dividend yield	1.7	%	1.8	%	2.4	%
Expected term, in years	0.2 - 6		6		1 - 6
Risk-free interest rate	0.1 - 1.1%		1.3 - 2.5%		0.4 - 2.9%

Employee stock option awards prior to 2005 include a reload feature for options granted to key employees. This feature allows employees to exercise options through a stock-for-stock exercise using mature shares, and employees are granted a new stock option (reload option) equal to the number of shares of Common Stock used to satisfy both the exercise price of the option and the minimum tax withholding requirements. The reload options granted have an exercise price equal to the fair market value of the Common Stock on the grant date. Stock options granted in conjunction with reloads vest immediately and have a term equal to the remaining life of the initial grant.

Beginning in 2004, new stock option awards granted vest one-third each year over a three year period and have a ten year contractual term. These grants do not contain a reload feature. Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period. Compensation expense is fully recognized for reload stock options as of the reload date.

In addition to stock options, we also occasionally grant cash-settled stock appreciation rights (“SARs”) to employees in certain foreign locations. There were no outstanding SARs as of December 31, 2012 and no SARs were granted during 2012, 2011 or 2010.

The following table summarizes the activity during the year ended December 31, 2012 for stock option and SARs awards:

	Shares		Weighted-Average Exercise Price
Outstanding at beginning of year	1,268,917		$	20.40
Granted	168,008		43.27
Exercised	(239,474	)	17.36
Forfeited	(6,030	)	36.06
Outstanding at end of year	1,191,421		$	24.16
Exercisable at end of year	844,679		$	18.92

The weighted-average grant date fair value of stock options granted during the years ended December 31, 2012, 2011 and 2010 was $16.60, $16.67 and $9.62, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2012, 2011 and 2010 was $5,826, $5,600 and $5,235, respectively. The aggregate intrinsic value of options outstanding and exercisable at December 31, 2012 was $23,577 and $21,145, respectively. The weighted-average remaining contractual life for options outstanding and exercisable as of December 31, 2012, was 6 years and 6 years, respectively. As of December 31, 2012, there was unrecognized compensation cost for nonvested options and rights of $3,027 which is expected to be recognized over a weighted-average period of 1.3 years.

Restricted Share Awards

Restricted share awards for employees generally have a three year vesting period from the effective date of the grant. Restricted share awards to non-employee directors vest upon a change of control or upon termination of service as a director occurring at least six months after grant date of the award so long as termination is for one of the following reasons: death; disability; retirement in accordance with Company policy (e.g., age, term limits, etc.); resignation at request of Board (other than for gross misconduct); resignation following at least six months’ advance notice; failure to be renominated (unless due to unwillingness to serve) or reelected by shareholders; or removal by shareholders.

The following table summarizes the activity during the year ended December 31, 2012, for nonvested restricted share awards:

	Shares		Weighted-Average Grant Date Fair Value
Nonvested at beginning of year	150,081		$	26.39
Granted	38,901		42.54
Vested	(46,628	)	18.47
Forfeited	—		—
Nonvested at end of year	142,354		$	33.40

The total fair value of shares vested during the year ended December 31, 2012, 2011 and 2010 was $861, $650 and $284, respectively. As of December 31, 2012, there was $1,718 of total unrecognized compensation cost related to nonvested shares which is expected to be recognized over a weighted-average period of 2.2 years.

Performance Share Awards

We grant performance share awards to key employees as a part of our long-term management compensation program. These awards are earned based upon achievement of certain financial performance targets. We determine the fair value of these awards as of the date of grant and recognize the expense over a three year performance period.

The 2012 performance share award covers the three year performance period from the beginning of fiscal year 2012 to the end of fiscal year 2014. Performance shares are granted in restricted stock units. They are payable in stock and vest solely upon achievement of certain financial performance targets during this three year period.

The 2011 performance share award covers the three year performance period from the beginning of fiscal year 2011 to the end of fiscal year 2013. Performance shares are granted in restricted stock units. They are payable in stock and vest solely upon achievement of certain financial performance targets during this three year period.

The 2010 performance share award covers the three year performance period from the beginning of fiscal year 2010 to the end of fiscal year 2012. Performance shares are granted in restricted stock units. They are payable in cash and vest solely upon achievement of certain financial performance targets during this three year period.

In 2009, we granted a combination of stock options, restricted stock awards and restricted stock units payable in cash to key employees as part of our management compensation program and did not grant performance share awards. These stock options and restricted share awards vest over a three year period and do not contain a performance requirement.

For the year ended 2010, we did not recognize any expense for the 2008 performance share awards as we do not deem the achievement of the predetermined financial performance targets to be probable.

Share-Based Liabilities

As of December 31, 2012 and 2011, we had $3,650 and $2,530 in total share-based liabilities recorded on our Consolidated Balance Sheets, respectively. During the years ended December 31, 2012, 2011 and 2010 we paid out $2,212, $506 and $81 related to 2009, 2008 and 2007 share-based liability awards, respectively.

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Consoldiated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
OPERATING ACTIVITIES
Net Earnings	$ 41,584	$ 32,713	$ 34,803
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
Depreciation	18,072	18,088	18,026
Amortization	2,800	3,330	3,166
Impairment of Intangible Assets	0	2,058	0
Deferred Income Taxes	3,166	(1,352)	(11,412)
Share-Based Compensation Expense	9,092	5,407	4,639
Allowance for Doubtful Accounts and Returns	1,427	1,879	1,403
Gain on Sale of Business	(784)	0	0
Other, Net	(126)	508	503
Changes in Operating Assets and Liabilities, Exluding the Impact of Acquisitions:
Accounts Receivable	(11,811)	(4,451)	(7,931)
Inventories	(149)	(7,665)	(4,391)
Accounts Payable	970	4,612	(1,445)
Employee Compensation and Benefits	(3,005)	1,177	1,162
Other Current Liabilities	1,549	1,711	6,058
Income Taxes	797	1,668	(1,716)
U.S. Pension Plan Contributions	(16,731)	0	0
Other Assets and Liabilities	715	(2,774)	(335)
Net Cash Provided by Operating Activities	47,566	56,909	42,530
INVESTING ACTIVITIES
Purchases of Property, Plant and Equipment	(15,623)	(13,902)	(10,529)
Proceeds form Disposals of Property, Plant and Equipment	1,028	601	595
Acquisition of Businesses, Net of Cash Acquired	(750)	(2,917)	(86)
Proceeds from Sale of Business	1,014	0	0
Decrease (Increase) in Restricted Cash	3,089	(3,279)	0
Net Cash Used for Investing Activities	(11,242)	(19,497)	(10,020)
FINANCING ACTIVITIES
Change in Short-Term Borrowings, Net	0	0	(7)
Payments of Long-Term Debt	(2,986)	(19,272)	(4,192)
Issuance of Long-Term Debt	0	20,000	0
Purchases of Common Stock	(25,343)	(17,603)	(3,153)
Proceeds from Issuance of Common Stock	4,167	4,214	6,467
Tax Benefit on Stock Plans	2,047	1,266	1,724
Dividends Paid	(12,817)	(12,852)	(11,181)
Net Cash Used for Financing Activities	(34,932)	(24,247)	(10,342)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	209	(355)	(701)
NET INCREASE IN CASH AND CASH EQUIVALENTS	1,601	12,810	21,467
Cash and Cash Equivalents at Beginning of Year	52,339	39,529	18,062
CASH AND CASH EQUIVALENTS AT END OF YEAR	53,940	52,339	39,529
Cash Paid During the Year for:
Income Taxes	11,563	13,158	13,908
Interest	2,375	2,059	1,559
Supplemental Non-Cash Investing and Financing Activities:
Capital Expenditures Funded Through Capital Leases	1,526	2,893	2,398
Capital Expenditures in Accounts Payable	1,582	2,669	689
Collateralized Borrowings	39	127	471
Notes Payable Related to Water Star, Inc. Acquisition	$ 0	$ 1,500	$ 0

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Consolidated Statements of Comprehensive Income [Abstract]
Net Earnings	$ 41,584	$ 32,713	$ 34,803
Other Comprehensive Income (Loss), net of tax:
Foreign currency translation adjustments, net of income tax (expense) of $(25), $- and $-, respectively	552	(3,141)	762
Pension adjustments, net of income tax benefit (expense) of $889, $2,354 and $(98), respectively	(1,648)	(3,822)	73
Total Other Comprehensive (Loss) Income, net of tax	(1,096)	(6,963)	835
Comprehensive Income	$ 40,488	$ 25,750	$ 35,638

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Debt

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Debt

8. Debt

Long-Term Debt as of December 31 consisted of the following:

	2012			2011
Long-Term Debt:
Bank borrowings	$	22		$	49
Credit facility borrowings	30,000			30,000
Notes Payable	750			1,500
Collateralized borrowings	39			127
Capital lease obligations	1,512			4,779
Total Long-Term Debt	32,323			36,455
Less: current portion	(2,042		)	(4,166		)
Long-term portion	$	30,281		$	32,289

As of December 31, 2012, we had committed lines of credit totaling approximately $125,000 and uncommitted lines of credit totaling approximately $87,640. There was $10,000 in outstanding borrowings under our JPMorgan facility and $20,000 borrowings under our Prudential facility as of December 31, 2012. In addition, we had stand alone letters of credit of approximately $2,014 outstanding and bank guarantees in the amount of approximately $498. Commitment fees on unused lines of credit for the year ended December 31, 2012 were $318.

Our most restrictive covenants are part of our Credit Agreement with JPMorgan, which are the same covenants in our Shelf Agreement with Prudential described below, and require us to maintain an indebtedness to EBITDA ratio of not greater than 3.00 to 1 and to maintain an EBITDA to interest expense ratio of no less than 3.50 to 1 as of the end of each quarter. As of December 31, 2012, our indebtedness to EBITDA ratio was 0.43 to 1 and our EBITDA to interest expense ratio was 32.96 to 1.

Credit Facilities

JPMorgan Chase Bank, National Association

On May 5, 2011, we entered into a Credit Agreement (the “2011 Credit Agreement”) with JPMorgan Chase Bank, N. A. (“JPMorgan”), as administrative agent and collateral agent, U.S. Bank National Association, as syndication agent, Wells Fargo Bank, National Association, and RBS Citizens, N.A., as co-documentation agents, and the Lenders (including JPMorgan) from time to time party thereto. Upon entry into the 2011 Credit Agreement, we repaid and terminated our June 19, 2007 Credit Agreement. The 2011 Credit Agreement provides us and certain of our foreign subsidiaries access to a senior unsecured credit facility until May 5, 2016, in the amount of $125,000, with an option to expand by up to $62,500 to a total of $187,500. Borrowings may be denominated in U.S. Dollars or certain other currencies. The 2011 Credit Agreement contains a $100,000 sublimit on borrowings by foreign subsidiaries.

The fee for committed funds under the 2011 Credit Agreement ranges from an annual rate of 0.25% to 0.40%, depending on our leverage ratio. Borrowings under the 2011 Credit Agreement bear interest at a rate per annum equal to the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50% and (c) the adjusted LIBOR rate for a one month period plus 1.0%, plus, in any such case, an additional spread of 0.50% to 1.10%, depending on our leverage ratio.

The 2011 Credit Agreement gives the lenders a pledge of 65% of the stock of certain first tier foreign subsidiaries. The obligations under the 2011 Credit Agreement are also guaranteed by our first tier domestic subsidiaries.

The 2011 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 2011 Credit Agreement contains the following covenants:

• a covenant requiring us to maintain an indebtedness to EBITDA ratio as of the end of each quarter of not greater than 3.00 to 1;

• a covenant requiring us to maintain an EBITDA to interest expense ratio as of the end of each quarter of no less than 3.50 to 1;

• a covenant restricting us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50,000 to $75,000 during any fiscal year based on our leverage ratio after giving effect to such payments; and

• a covenant restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25,000.

As of December 31, 2012 we were in compliance with all covenants under the Credit Agreement. There was $10,000 in outstanding borrowings under this facility at December 31, 2012, with a weighted average interest rate of 1.72%.

Prudential Investment Management, Inc.

On May 5, 2011, we entered into Amendment No. 1 to our Private Shelf Agreement (the “Amendment”), which amends the Private Shelf Agreement, dated as of July 29, 2009, with Prudential Investment Management, Inc. (“Prudential”) and Prudential affiliates from time to time party thereto (the “Shelf Agreement”).

The Amendment principally provides the following changes to the Shelf Agreement:

• elimination of the security interest in our personal property and subsidiaries;

• an amendment to the maximum leverage ratio to not greater than 3.00 to 1 for any period ending on or after March 31, 2011;

• an amendment to our restriction regarding the payment of dividends or repurchase of stock to restrict us from paying dividends or repurchasing stock if, after giving effect to such payments, our leverage ratio is greater than 2.00 to 1, in such case limiting such payments to an amount ranging from $50,000 to $75,000 during any fiscal year based on our leverage ratio after giving effect to such payments; and

• an amendment to Permitted Acquisitions restricting our ability to make acquisitions, if, after giving pro-forma effect to such acquisition, our leverage ratio is greater than 2.75 to 1, in such case limiting acquisitions to $25,000.

On July 24, 2012, we entered into Amendment No. 2 to our Private Shelf Agreement (“Amendment No. 2”), which amends the Shelf Agreement. The principal change effected by Amendment No. 2 is an extension of the Issuance Period for Shelf Notes under the Shelf Agreement. The Issuance Period now expires on July 24, 2015.

As of December 31, 2012, there was $20,000 in outstanding borrowings under this facility; the $10,000 Series A notes issued in March 2011 with a fixed interest rate of 4.00% and a 7 year term serially maturing from 2014 to 2018; and the $10,000 Series B notes issued in June 2011 with a fixed interest rate of 4.10% and a 10 year term serially maturing from 2015 to 2021. We were in compliance with all covenants of the Shelf Agreement as of December 31, 2012.

The Royal Bank of Scotland Citizens, N.A.

On September 14, 2010, we entered into an overdraft facility with The Royal Bank of Scotland Citizens, N.A. in the amount of 2,000 Euros or approximately $2,640. There was no balance outstanding on this facility as of December 31, 2012.

HSBC Bank (China) Company Limited, Shanghai Branch

On June 20, 2012, we entered into a banking facility with the HSBC Bank (China) Company Limited, Shanghai Branch in the amount of $5,000 for the purpose of issuing general bank guarantees. There was no balance outstanding on this facility as of December 31, 2012.

Notes Payable

On May 31, 2011, we incurred $1,500 in debt related to installment payments due to the former owners of Water Star in connection with our acquisition of Water Star, of which $750 remains outstanding as of December 31, 2012.

Collateralized Borrowings

Collateralized borrowings represent deferred sales proceeds on certain leasing transactions with third-party leasing companies. These transactions are accounted for as borrowings, with the related assets capitalized as property, plant and equipment and depreciated straight-line over the lease term.

Capital Lease Obligations

Capital lease obligations outstanding are primarily related to sale-leaseback transactions with third-party leasing companies whereby we sell our manufactured equipment to the leasing company and lease it back. The equipment covered by these leases is rented to our customers over the lease term.

The aggregate maturities of our outstanding debt including capital lease obligations as of December 31, 2012, are as follows:

2013	$	3,101
2014	3,221
2015	4,241
2016	14,002
2017	3,792
Thereafter	8,203
Total minimum obligations	$	36,560
Less: amount representing interest	(4,237		)
Total	$	32,323

XML

Document and Entity Information Document (USD $)	12 Months Ended
	Dec. 31, 2012	Jan. 31, 2013	Jun. 30, 2012
Entity Information [Line Items]
Entity Registrant Name	Tennant Company
Entity Central Index Key	0000097134
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 732,202,104
Entity Common Stock, Shares Outstanding		18,478,417
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q4
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012

XML

Other Current Liabilities

12 Months Ended

Dec. 31, 2012

Other Liabilities, Current [Abstract]

Other Current Liabilities

9. Other Current Liabilities

Other Current Liabilities as of December 31, consisted of the following:

	2012		2011
Taxes, other than income taxes	$	4,768	$	5,629
Warranty	9,357		8,759
Deferred revenue	1,878		3,159
Rebates	6,983		5,185
Freight	3,999		3,945
Miscellaneous accrued expenses	8,115		8,974
Other	3,744		3,753
Total	$	38,844	$	39,404

The changes in warranty reserves for the three years ended December 31 were as follows:

	2012			2011			2010
Beginning balance	$	8,759		$	7,043		$	5,985
Product warranty provision	12,395			12,815			10,506
(Divested) acquired reserves	(236		)	10			—
Foreign currency	(15		)	(63		)	(88		)
Claims paid	(11,546		)	(11,046		)	(9,360		)
Ending balance	$	9,357		$	8,759		$	7,043

XML

Consolidated Statements of Comprehensive Income (Parenthetical) (Parentheticals) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Consolidated Statments of Comprehensive Income (Parenthetical)
Foreign currency translation adjustments, income tax (expense)	$ (25)	$ 0	$ 0
Pension adjustments, income tax benefit (expense)	$ 889	$ 2,354	$ (98)

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Management Actions

12 Months Ended

Dec. 31, 2012

Restructuring and Related Activities [Abstract]

Management Actions

3. Management Actions

2010 Action – During the fourth quarter of 2010, we implemented a restructuring action. A pre-tax charge of $1,671 was recognized in the fourth quarter of 2010 as a result of that action. The pre-tax charge consisted of severance and outplacement services and was included within Selling and Administrative Expense in the 2010 Consolidated Statement of Earnings.

A reconciliation of the beginning and ending liability balances is as follows:

	Severance, Early Retirement and Related Costs
2010 restructuring action	$	1,671
Cash payments	(87		)
December 31, 2010 balance	$	1,584
2011 utilization:
Cash payments	(1,534		)
Foreign currency adjustments	(54		)
Change in estimate	110
December 31, 2011 balance	$	106
2012 utilization:
Cash payments	(102		)
Foreign currency adjustments	(4		)
December 31, 2012 balance	$	—

2012 Action – During the third quarter of 2012, we implemented a restructuring action. A pre-tax charge of $760 was recognized in the third quarter as a result of this action. The pre-tax charge consisted primarily of severance and outplacement services and was included within Selling and Administrative Expense in the Consolidated Statements of Earnings.

A reconciliation of the beginning and ending liability balances is as follows:

	Severance and Related Costs
2012 restructuring action	$	760
Cash payments	(414		)
Foreign currency adjustments	27
December 31, 2012 balance	$	373

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Newly Adopted Accounting Principles

12 Months Ended

Dec. 31, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Newly Adopted Accounting Pronouncements

2. Newly Adopted Accounting Pronouncements

Fair Value Measurements and Disclosures

In May 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance for fair value measurements providing common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. While the guidance is largely consistent with existing fair value measurement principles in U.S. GAAP, it expands existing disclosure requirements for fair value measurements and makes other amendments. Key additional disclosures include quantitative disclosures about unobservable inputs in Level 3 measures, qualitative information about sensitivity of Level 3 measures and valuation process, and classification within the fair value hierarchy for instruments where fair value is only disclosed in the footnotes but the carrying amount is on some other basis. We adopted this guidance January 1, 2012. This guidance did not have an impact on our results of operations or financial position.

Comprehensive Income

In June 2011, the FASB issued guidance on the presentation of comprehensive income that requires us to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of equity. In December 2011, the FASB issued an amendment to this standard which defers the requirement that companies present reclassification adjustments for each component of accumulated other comprehensive income in both net income and other comprehensive income on the face of the financial statements and requires retrospective application. We adopted this guidance January 1, 2012. Since this standard impacts presentation and disclosure requirements only, this adopted guidance did not have an impact on our results of operations or financial position.

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

Income from continuing operations for the three years ended December 31, was as follows:

	2012		2011		2010
U.S. operations	$	47,220	$	40,282	$	26,297
Foreign operations	12,670		8,448		8,430
Total	$	59,890	$	48,730	$	34,727

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

	2012			2011			2010
Current:
Federal	$	8,158		$	10,321		$	6,756
Foreign	4,633			2,277			3,005
State	1,089			1,450			1,214
	$	13,880		$	14,048		$	10,975
Deferred:
Federal	$	4,423		$	2,330		$	(10,541	)
Foreign	(126		)	(203		)	(248		)
State	129			(158		)	(262		)
	$	4,426		$	1,969		$	(11,051	)
Total:
Federal	$	12,581		$	12,651		$	(3,785	)
Foreign	4,507			2,074			2,757
State	1,218			1,292			952
	$	18,306		$	16,017		$	(76	)

U.S. income taxes have not been provided on approximately $21,277 of undistributed earnings of non-U.S. subsidiaries. We do not have any plans to repatriate the undistributed earnings. Any repatriation from foreign subsidiaries that would result in incremental U.S. taxation is not being considered. It is management’s belief that reinvesting these earnings outside the U.S. is the most efficient use of capital.

We have Dutch and German tax loss carryforwards of approximately $10,136 and $15,292, respectively. If unutilized, the Dutch tax loss carryforward will expire after 9 years. The German tax loss carryforward has no expiration date. Because of the uncertainty regarding realization of the Dutch tax loss carryforward, a valuation allowance was established. This valuation allowance increased in 2012 due to results of operations.

We have foreign tax credit carryforwards of approximately $6,034. If unutilized, foreign tax credit carryforwards will expire in 2020. Based upon evaluation, as of December 31, 2012, no valuation allowance has been recorded. We have Dutch foreign tax credit carryforwards of $687. Because of the uncertainty regarding utilization of the Dutch foreign tax credit carryforward, a valuation allowance was established during 2012 that impacted Net Earnings by $687.

A valuation allowance for the remaining deferred tax assets is not required since it is more likely than not that they will be realized through carryback to taxable income in prior years, future reversals of existing taxable temporary differences and future taxable income.

Our effective income tax rate varied from the U.S. federal statutory tax rate for the three years ended December 31, was as follows:

	2012		2011		2010
Tax at statutory rate	35.0	%	35.0	%	35.0	%
Increases (decreases) in the tax rate from:
State and local taxes, net of federal benefit	1.0		2.0		0.7
Effect of foreign operations	(6.2	)	0.5		0.5
International restructuring	—		—		(31.4	)
Effect of changes in valuation allowances	2.3		—		0.1
Domestic production activities deduction	(1.5	)	(1.6	)	(3.0	)
Other, net	—		(3.0	)	(2.1	)
Effective income tax rate	30.6	%	32.9	%	(0.2	)%

Deferred tax assets and liabilities were comprised of the following as of December 31:

	2012			2011			2010
Deferred tax assets:
Inventories, principally due to additional costs inventoried for tax purposes and changes in inventory reserves	$	28		$	426		$	1,081
Employee wages and benefits, principally due to accruals for financial reporting purposes	18,608			20,910			17,948
Warranty reserves accrued for financial reporting purposes	2,641			2,625			2,175
Accounts receivable, principally due to allowance for doubtful accounts and tax accounting method for equipment rentals	1,540			1,464			1,252
Tax loss carryforwards	6,619			5,915			12,725
Valuation allowance	(4,719		)	(3,229		)	(9,170		)
Tax credit carryforwards	6,720			8,554			10,119
Other	2,329			1,777			1,937
Total deferred tax assets	$	33,766		$	38,442		$	38,067
Deferred tax liabilities:
Property, Plant and Equipment, principally due to differences in depreciation and related gains	$	7,945		$	9,167		$	8,562
Goodwill and Intangible Assets	6,818			7,093			8,390
Total deferred tax liabilities	$	14,763		$	16,260		$	16,952
Net deferred tax assets	$	19,003		$	22,182		$	21,115

The valuation allowance at December 31, 2012, principally applies to Dutch tax loss and tax credit carryforwards that, 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.

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

	2012			2011
Balance at January 1,	$	3,424		$	5,272
Decreases as a result of tax positions taken during a prior period	—			(765		)
Increases as a result of tax position taken during the current year	611			828
Decreases relating to settlements with taxing authorities	—			(193		)
Reductions as a result of a lapse of the applicable statute of limitations	(447		)	(1,551		)
Decreases as a result of foreign currency fluctuations	(108		)	(167		)
Balance at December 31,	$	3,480		$	3,424

Included in the balance of unrecognized tax benefits at December 31, 2012 and 2011 are potential benefits of $3,259 and $3,209, respectively, that if recognized, would affect the effective tax rate from continuing operations.

We recognize potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. In addition to the liability of $3,480 and $3,424 for unrecognized tax benefits as of December 31, 2012 and 2011 was approximately $462 and $427, respectively, for accrued interest and penalties. To the extent interest and penalties are not assessed with respect to uncertain tax positions, the amounts accrued will be revised and reflected as an adjustment to income tax expense.

We are subject to U.S. federal income tax as well as income tax of numerous state and foreign jurisdictions. We are generally no longer subject to U.S. federal tax examinations for taxable years before 2011 and with limited exceptions, state and foreign income tax examinations for taxable years before 2004.

The Internal Revenue Service completed its examination of the U.S. income tax returns for the years 2009 and 2010 during the third quarter of 2012. The IRS's adjustments to certain tax positions were not material and were fully reserved. We are currently undergoing income examinations in various state and foreign jurisdictions covering 2004 to 2010. Although the final outcome of these examinations cannot be currently determined, we believe that we have adequate reserves with respect to these examinations.

We do not anticipate that total unrecognized tax benefits will change significantly within the next 12 months.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

10. Fair Value Measurements

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 at December 31, 2012 is as follows:

	Fair Value		Level 1		Level 2		Level 3
Assets:
Foreign currency forward exchange contracts	$	388	$	—	$	388	$	—
Total Assets	$	388	$	—	$	388	$	—
Liabilities:
Foreign currency forward exchange contracts	$	404	$	—	$	404	$	—
Total Liabilities	$	404	$	—	$	404	$	—

Our foreign currency forward exchange contracts are valued based on quoted forward foreign exchange prices at the reporting date.

We use derivative instruments to manage exposures to foreign currency only in an attempt to limit underlying exposures from currency fluctuations and not for trading purposes. Gains or losses on forward foreign exchange contracts to economically hedge foreign currency-denominated assets and liabilities are recognized in Other Current Assets and Other Current Liabilities within the Consolidated Balance Sheets and are recognized in Other Income (Expense) under Net Foreign Currency Transaction Gains (Losses) within the Consolidated Statements of Earnings. As of December 31, 2012 the fair value of such contracts outstanding was an asset of $388 and a liability of $404. As of December 31, 2011 the fair value of such contracts outstanding was an asset of $1,015 and a liability of $102. We recognized a net gain of $1,026 during 2012, a net loss of $1,444 during 2011 and a net gain of $1,216 during 2010. At December 31, 2012 and 2011, the notional amounts of foreign currency forward exchange contracts outstanding were $42,475 and $45,524, respectively.

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.

The fair market value of our Long-Term Debt approximates cost, based on the borrowing rates currently available to us for bank loans with similar terms and remaining maturities.

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

6. Property, Plant and Equipment

Property, Plant and Equipment and related Accumulated Depreciation, including equipment under capital leases, as of December 31, consisted of the following:

	2012			2011
Land	$	4,294		$	4,383
Buildings and improvements	52,597			49,931
Machinery and manufacturing equipment	140,330			135,794
Office equipment	88,814			86,740
Work in progress	8,875			10,101
Total Property, Plant and Equipment	294,910			286,949
Less: Accumulated Depreciation	(208,717		)	(199,795		)
Net Property, Plant and Equipment	$	86,193		$	87,154

Depreciation expense was $18,072 in 2012, $18,088 in 2011 and $18,026 in 2010.

XML

Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Commitments and Contingencies Disclosure [Abstract]
Lease expiration date, maximum	Jan. 01, 2020
Rent expense	$ 17,524	$ 17,375	$ 16,215
Minimum rentals for aggregate lease commitments
2013	8,469
2014	4,252
2015	2,555
2016	1,247
2017	209
Thereafter	89
Total	16,821
Aggregate residual value at lease expiration for vehicle leases	11,334
Guaranteed aggregate residual value at lease expiration for vehicle leases	7,231
Liability for the estimated end-of-term loss related to residual value guarantee	536
Term of unrecorded unconditional purchase obligation	three year
Minimum purchase obligation	$ 2,102

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Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

Acquisitions and Divestitures

4. Acquisitions and Divestitures

Acquisitions

On May 31, 2011, we acquired Water Star, Inc. (“Water Star”), a Newbury, Ohio firm specializing in electrochemistry for $4,456. The total purchase price of $4,456 is comprised of $2,956 paid at closing and two$750 installment payments which will be paid in cash on the first and second anniversary dates of the acquisition. The first installment payment was made on May 31, 2012. These installment payments are not contingent on any future services or other financial targets. This acquisition is consistent with our strategy to expand our intellectual property in support of our long-term vision to deliver sustainable, breakthrough innovations.

The components of the purchase price of the business combination described above have been allocated as follows:

Current Assets	$	426
Property, Plant and Equipment, net	167
Identified Intangible Assets	3,800
Goodwill	472
Total Assets Acquired	4,865
Current Liabilities	409
Total Liabilities Assumed	409
Net Assets Acquired	$	4,456

Divestitures

On July 31, 2012, we entered into a Share Purchase Agreement (“SPA”) with M&F Management and Financing GmbH (“M&F”) for the sale of ownership of our subsidiary, Tennant CEE GmbH and our minority interest in a joint venture, OOO Tennant. In exchange for the ownership of these entities, we received €815, or $1,014 as of the date of sale, in cash and financed the remaining purchase price of €6,166. A total of €2,126, or $2,806 as of December 31, 2012, will be received in equal quarterly payments during 2013 and the remaining €3,225, or $4,257 as of December 31, 2012, will be received in equal installments on the first, second and third anniversary dates of the divestiture. As a result of this divestiture, we recorded a pre-tax gain of $784 in our Profit from Operations in the Consolidated Statements of Earnings.

M&F is now a master distributor of Tennant products in the Central Eastern Europe, Middle East and Africa markets. In addition, as further discussed in Note 19, M&F is a related party to Tennant. We have identified M&F as a variable interest entity (“VIE”) and have performed a qualitative assessment that considered M&F's purpose and design, our involvement and the risks and benefits and determined that Tennant is not the primary beneficiary of this VIE. The only financing Tennant has provided to M&F was related to the SPA as noted above and there are no arrangements that would require us to provide significant financial support in the future.

The assets and liabilities transferred under the Share Purchase Agreement on the date of sale were as follows:

Accounts Receivable	$	4,398
Inventories	4,271
Other Current Assets	87
Current Assets	8,756
Property, Plant and Equipment, net	170
Total Assets Divested	8,926
Current Liabilities	1,121
Total Liabilities Divested	1,121
Net Assets Divested	$	7,805

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Inventories

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

Inventories

5. Inventories

Inventories as of December 31, consisted of the following:

	2012			2011
Inventories carried at LIFO:
Finished goods	$	33,546		$	32,648
Raw materials, production parts and work-in-process	14,291			16,611
LIFO reserve	(27,608		)	(27,926		)
Total LIFO inventories	20,229			21,333
Inventories carried at FIFO:
Finished goods	25,623			31,912
Raw materials, production parts and work-in-process	12,284			12,667
Total FIFO inventories	37,907			44,579
Total Inventories	$	58,136		$	65,912

The LIFO reserve approximates the difference between LIFO carrying cost and FIFO.

XML

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

For purposes of performing our goodwill impairment analysis, we have identified our reporting units as North America; Latin America; Europe, Middle East, Africa (“EMEA”) and Asia Pacific. As of December 31, 2012 and 2011, the Company performed an analysis of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Based on the Company’s analysis of qualitative factors, the Company determined that is was not necessary to perform the two-step goodwill impairment test for any of its reporting units. Each of our reporting units were tested for impairment using the two-step goodwill impairment test as of December 31, 2010 and based upon our analysis, the estimated fair values of our reporting units substantially exceeded their carrying amounts.

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

	Goodwill			Accumulated Impairment Losses			Total
Balance as of December 31, 2011	$	66,523		$	(46,220	)	$	20,303
Foreign currency fluctuations	2,062			(2,648		)	(586		)
Balance as of December 31, 2012	$	68,585		$	(48,868	)	$	19,717
Balance as of December 31, 2010	$	67,008		$	(46,585	)	$	20,423
Additions	688			—			688
Foreign currency fluctuations	(1,173		)	365			(808		)
Balance as of December 31, 2011	$	66,523		$	(46,220	)	$	20,303

The balances of acquired Intangible Assets, excluding Goodwill, as of December 31, are as follows:

	Customer Lists and Service Contracts			Trade Name			Technology			Total
Balance as of December 31, 2012
Original cost	$	23,817		$	4,657		$	7,197		$	35,671
Accumulated amortization	(9,907		)	(1,565		)	(2,806		)	(14,278		)
Carrying amount	$	13,910		$	3,092		$	4,391		$	21,393
Weighted-average original life (in years)	15			14			13
Balance as of December 31, 2011
Original cost	$	25,987		$	4,583		$	7,136		$	37,706
Accumulated amortization	(10,387		)	(1,209		)	(2,352		)	(13,948		)
Carrying amount	$	15,600		$	3,374		$	4,784		$	23,758
Weighted-average original life (in years)	14			14			13

The additions to Goodwill during 2011 were a result of our Water Star acquisition as well as recording a portion of the Shanghai ShenTan Mechanical and Electrical Equipment Co. Ltd. (“Shanghai ShenTan”) earn-out. The Water Star intangible asset consisted of technology with an estimated life of 15 years.

During the second quarter of 2011, we impaired customer lists and technology Intangible Assets totaling $1,805 related to the obsolescence of the two Hofmans outdoor city cleaning products in Europe. This impairment charge is included within Selling and Administrative Expense in the 2011 Consolidated Statement of Earnings.

Amortization expense on Intangible Assets was $2,800, $3,330 and $3,166 for the years ended December 31, 2012, 2011 and 2010, respectively.

Estimated aggregate amortization expense based on the current carrying amount of amortizable Intangible Assets for each of the five succeeding years is as follows:

2013	$	2,213
2014	2,178
2015	2,154
2016	2,141
2017	1,877
Thereafter	10,830
Total	$	21,393

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Segment Reporting (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting [Abstract]
Number of operating segments									4
Revenues from External Customers and Long-Lived Assets
Net Sales	$ 187,507	$ 178,268	$ 199,493	$ 173,712	$ 193,158	$ 186,990	$ 201,259	$ 172,591	$ 738,980	$ 753,998	$ 667,667
Long-Lived Assets	135,056				133,428				135,056	133,428	137,067
Maximum percentage sales by single customer to consolidated net sales									10.00%
Equipment
Revenues from External Customers and Long-Lived Assets
Net Sales									435,900	452,398	389,137
Parts and consumables
Revenues from External Customers and Long-Lived Assets
Net Sales									175,782	177,999	160,994
Service and other
Revenues from External Customers and Long-Lived Assets
Net Sales									106,048	100,650	96,828
Specialty surface coatings
Revenues from External Customers and Long-Lived Assets
Net Sales									21,250	22,951	20,708
Americas
Revenues from External Customers and Long-Lived Assets
Net Sales									491,661	481,426	424,462
Long-Lived Assets	99,666				98,855				99,666	98,855	98,258
Europe, Middle East, Africa
Revenues from External Customers and Long-Lived Assets
Net Sales									166,208	188,338	172,619
Long-Lived Assets	30,891				29,390				30,891	29,390	34,497
Asia Pacific
Revenues from External Customers and Long-Lived Assets
Net Sales									81,111	84,234	70,586
Long-Lived Assets	$ 4,499				$ 5,183				$ 4,499	$ 5,183	$ 4,312

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Related Party Transactions (Details) (Water Star, Inc., USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Water Star, Inc.
Related Party Transactions
Amount of total installment payments	$ 1,500

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Numerator:
Net Earnings	$ 13,844	$ 8,745	$ 13,671	$ 5,324	$ 11,264	$ 9,728	$ 5,855	$ 5,866	$ 41,584	$ 32,713	$ 34,803
Weighted Average Number of Shares Outstanding, Basic									18,544,896	18,832,693	18,805,494
Effect of dilutive securities - employee stock options (in shares)									557,120	527,735	526,609
Weighted Average Number of Shares Outstanding, Diluted									19,102,016	19,360,428	19,332,103
Earnings Per Share, Basic	$ 0.75	$ 0.47	$ 0.74	$ 0.28	$ 0.60	$ 0.52	$ 0.31	$ 0.31	$ 2.24	$ 1.74	$ 1.85
Earnings Per Share, Diluted	$ 0.73	$ 0.46	$ 0.71	$ 0.28	$ 0.59	$ 0.50	$ 0.30	$ 0.30	$ 2.18	$ 1.69	$ 1.80
Anti-dilutive securities excluded from earnings per share calculation (in shares)									233,655	123,292	264,447

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment and related Accumulated Depreciation, including equipment under capital leases, as of December 31, consisted of the following:

	2012			2011
Land	$	4,294		$	4,383
Buildings and improvements	52,597			49,931
Machinery and manufacturing equipment	140,330			135,794
Office equipment	88,814			86,740
Work in progress	8,875			10,101
Total Property, Plant and Equipment	294,910			286,949
Less: Accumulated Depreciation	(208,717		)	(199,795		)
Net Property, Plant and Equipment	$	86,193		$	87,154

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Property, Plant and Equipment (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Property, Plant and Equipment
Property, Plant and Equipment	$ 294,910	$ 286,949
Accumulated Depreciation	(208,717)	(199,795)
Property, Plant and Equipment, Net	86,193	87,154
Depreciation	18,072	18,088	18,026
Land
Property, Plant and Equipment
Property, Plant and Equipment	4,294	4,383
Buildings and improvements
Property, Plant and Equipment
Property, Plant and Equipment	52,597	49,931
Machinery and manufacturing equipment
Property, Plant and Equipment
Property, Plant and Equipment	140,330	135,794
Office equipment
Property, Plant and Equipment
Property, Plant and Equipment	88,814	86,740
Work in progress
Property, Plant and Equipment
Property, Plant and Equipment	$ 8,875	$ 10,101

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Shareholders' Equity

12 Months Ended

Dec. 31, 2012

Stockholders' Equity Note [Abstract]

Shareholders' Equity

12. Shareholders' Equity

Authorized Shares

We are authorized to issue an aggregate of 61,000,000 shares; 60,000,000 are designated as Common Stock, having a par value of $0.375 per share, and 1,000,000 are designated as Preferred Stock, having a par value of $0.02 per share. The Board of Directors is authorized to establish one or more series of preferred stock, setting forth the designation of each such series, and fixing the relative rights and preferences of each such series.

Purchase Rights

On November 10, 2006, the Board of Directors approved a Rights Agreement and declared a dividend of one preferred share purchase right for each outstanding share of Common Stock. Each right entitles the registered holder to purchase from us one one-hundredth of a Series A Junior Participating Preferred Share of the par value of $0.02 per share at a price of $100 per one hundredth of a Preferred Share, subject to adjustment. The rights are not exercisable or transferable apart from the Common Stock until the earlier of: (i) the close of business on the fifteenth day following a public announcement that a person or group of affiliated or associated persons has become an “Acquiring Person” (i.e., has become, subject to certain exceptions, including for stock ownership by employee benefit plans, the beneficial owner of 20% or more of the outstanding Common Stock), or (ii) the close of business on the fifteenth day following the first public announcement of a tender offer or exchange offer the consummation of which would result in a person or group of affiliated or associated persons becoming, subject to certain exceptions, the beneficial owner of 20% or more of the outstanding Common Stock (or such later date as may be determined by our Board of Directors prior to a person or group of affiliated or associated persons becoming an Acquiring Person). After a person or group becomes an Acquiring Person, each holder of a Right (other than an Acquiring Person) will be able to exercise the right at the current exercise price of the Right and receive the number of shares of Common Stock having a market value of two times the exercise price of the right, or, depending upon the circumstances in which the rights became exercisable, the number of common shares of the acquiring company having a market value of two times the exercise price of the right. At no time do the rights have any voting power. We may redeem the rights for $0.001 per right at any time prior to a person or group acquiring 20% or more of the Common Stock. Under certain circumstances, the Board of Directors may exchange the rights for our Common Stock or reduce the 20% thresholds to not less than 10%. The rights will expire on December 26, 2016, unless extended or earlier redeemed or exchanged by us.

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Segment Reporting

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

17. Segment Reporting

We are organized into four operating segments: North America; Latin America; Europe, Middle East, Africa; and Asia Pacific. We combine our North America and Latin America operating segments into the “Americas” for reporting Net Sales by geographic area. 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 following table presents the Net Sales by operating segment for the years ended December 31:

	2012		2011		2010
Net Sales:
Americas	$	491,661	$	481,426	$	424,462
Europe, Middle East, Africa	166,208		188,338		172,619
Asia Pacific	81,111		84,234		70,586
Total	$	738,980	$	753,998	$	667,667

The following table presents long lived assets by operating segment as of December 31:

	2012		2011		2010
Long-lived assets:
Americas	$	99,666	$	98,855	$	98,258
Europe, Middle East, Africa	30,891		29,390		34,497
Asia Pacific	4,499		5,183		4,312
Total	$	135,056	$	133,428	$	137,067

Accounting policies of the operations in the various operating segments are the same as those described in Note 1 of the Consolidated Financial Statements. Net Sales are attributed to each operating segment based on the country from which the product is shipped and are net of intercompany sales. Information regarding sales to customers geographically located in the United States is provided in Item 1, Segment and Geographic Area Financial Information. No single customer represents more than 10% of our consolidated Net Sales. Long-lived assets consist of Property, Plant and Equipment, Goodwill, Intangible Assets and certain other assets.

The following table presents revenues for groups of similar products and services for the years ended December 31:

	2012		2011		2010
Net Sales:
Equipment	$	435,900	$	452,398	$	389,137
Parts and consumables	175,782		177,999		160,994
Service and other	106,048		100,650		96,828
Specialty surface coatings	21,250		22,951		20,708
Total	$	738,980	$	753,998	$	667,667

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Divestitures (Details) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2012 Tennant CEE GmbH and OOO Tennant USD ($)	Dec. 31, 2012 Tennant CEE GmbH and OOO Tennant EUR (€)	Jul. 31, 2012 Tennant CEE GmbH and OOO Tennant USD ($)
Divestitures
Date of divestiture				Jul. 31, 2012	Jul. 31, 2012
Cash received as part of selling price				$ 1,014	€ 815
Total selling price					6,166
Total amount of installment payments to be received quarterly in 2013				2,806	2,126
Total amount of installment payments to be received on first, second and third anniversary dates				4,257	3,225
Gain on Sale of Business	784	0	0	784
Assets and Liabilities Divested
Accounts Receivable						4,398
Inventories						4,271
Other Current Assets						87
Current Assets						8,756
Property, Plant and Equipment						170
Total Assets Divested						8,926
Current Liabilities						1,121
Total Liabilities Divested						1,121
Net Assets Divested						$ 7,805

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income from continuing operations

Income from continuing operations for the three years ended December 31, was as follows:

	2012		2011		2010
U.S. operations	$	47,220	$	40,282	$	26,297
Foreign operations	12,670		8,448		8,430
Total	$	59,890	$	48,730	$	34,727

Income tax expense (benefit)

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

	2012			2011			2010
Current:
Federal	$	8,158		$	10,321		$	6,756
Foreign	4,633			2,277			3,005
State	1,089			1,450			1,214
	$	13,880		$	14,048		$	10,975
Deferred:
Federal	$	4,423		$	2,330		$	(10,541	)
Foreign	(126		)	(203		)	(248		)
State	129			(158		)	(262		)
	$	4,426		$	1,969		$	(11,051	)
Total:
Federal	$	12,581		$	12,651		$	(3,785	)
Foreign	4,507			2,074			2,757
State	1,218			1,292			952
	$	18,306		$	16,017		$	(76	)

Effective tax rate reconciliation

Our effective income tax rate varied from the U.S. federal statutory tax rate for the three years ended December 31, was as follows:

	2012		2011		2010
Tax at statutory rate	35.0	%	35.0	%	35.0	%
Increases (decreases) in the tax rate from:
State and local taxes, net of federal benefit	1.0		2.0		0.7
Effect of foreign operations	(6.2	)	0.5		0.5
International restructuring	—		—		(31.4	)
Effect of changes in valuation allowances	2.3		—		0.1
Domestic production activities deduction	(1.5	)	(1.6	)	(3.0	)
Other, net	—		(3.0	)	(2.1	)
Effective income tax rate	30.6	%	32.9	%	(0.2	)%

Deferred tax assets and liabilities

Deferred tax assets and liabilities were comprised of the following as of December 31:

	2012			2011			2010
Deferred tax assets:
Inventories, principally due to additional costs inventoried for tax purposes and changes in inventory reserves	$	28		$	426		$	1,081
Employee wages and benefits, principally due to accruals for financial reporting purposes	18,608			20,910			17,948
Warranty reserves accrued for financial reporting purposes	2,641			2,625			2,175
Accounts receivable, principally due to allowance for doubtful accounts and tax accounting method for equipment rentals	1,540			1,464			1,252
Tax loss carryforwards	6,619			5,915			12,725
Valuation allowance	(4,719		)	(3,229		)	(9,170		)
Tax credit carryforwards	6,720			8,554			10,119
Other	2,329			1,777			1,937
Total deferred tax assets	$	33,766		$	38,442		$	38,067
Deferred tax liabilities:
Property, Plant and Equipment, principally due to differences in depreciation and related gains	$	7,945		$	9,167		$	8,562
Goodwill and Intangible Assets	6,818			7,093			8,390
Total deferred tax liabilities	$	14,763		$	16,260		$	16,952
Net deferred tax assets	$	19,003		$	22,182		$	21,115

Reconciliation of unrecognized tax benefits

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

	2012			2011
Balance at January 1,	$	3,424		$	5,272
Decreases as a result of tax positions taken during a prior period	—			(765		)
Increases as a result of tax position taken during the current year	611			828
Decreases relating to settlements with taxing authorities	—			(193		)
Reductions as a result of a lapse of the applicable statute of limitations	(447		)	(1,551		)
Decreases as a result of foreign currency fluctuations	(108		)	(167		)
Balance at December 31,	$	3,480		$	3,424

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Consoldiated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Current Assets:
Cash and Cash Equivalents	$ 53,940	$ 52,339
Restricted Cash	187	3,279
Receivables:
Trade, less Allowance of $4,399 and $4,828, respectively	131,470	123,920
Other	6,677	4,953
Net Receivables	138,147	128,873
Inventories	58,136	65,912
Prepaid Expenses	11,309	10,320
Deferred Income Taxes, Current Portion	11,339	10,358
Other Current Assets	388	1,015
Total Current Assets	273,446	272,096
Property, Plant and Equipment	294,910	286,949
Accumulated Depreciation	(208,717)	(199,795)
Property, Plant and Equipment, Net	86,193	87,154
Deferred Income Taxes, Long-Term Portion	10,989	15,014
Goodwill	19,717	20,303
Intangible Assets, Net	21,393	23,758
Other Assets	9,022	5,937
Total Assets	420,760	424,262
Current Liabilities:
Current Portion of Long-Term Debt	2,042	4,166
Accounts Payable	47,002	46,869
Employee Compensation and Benefits	33,021	32,934
Income Taxes Payable	785	619
Other Current Liabilities	38,844	39,404
Total Current Liabilities	121,694	123,992
Long-Term Liabilities:
Long-Term Debt	30,281	32,289
Employee-Related Benefits	25,873	40,089
Deferred Income Taxes, Long-Term Portion	3,325	3,189
Other Liabilities	4,533	3,851
Total Long-Term Liabilities	64,012	79,418
Total Liabilities	185,706	203,410
Commitments and Contingencies (Note 13)
Shareholders' Equity:
Preferred Stock of $0.02 par value per share, 1,000,000 shares authorized; no shares issued or outstanding	0	0
Common Stock, $0.375 par value per share, 60,000,000 shares authorized; 18,464,450 and 18,834,940 issued and outstanding, respectively	6,924	7,063
Additional Paid-In Capital	22,398	15,082
Retained Earnings	236,065	227,944
Accumulated Other Comprehensive Loss	(30,333)	(29,237)
Total Shareholders' Equity	235,054	220,852
Total Liabilities and Shareholders' Equity	$ 420,760	$ 424,262

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary of Significan Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1. Summary of Significant Accounting Policies

Nature of Operations – Our primary business is designing, manufacturing and marketing solutions that help create a cleaner, safer, healthier world. Our products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; chemical-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading floors and other surfaces. We sell our products through our direct sales and service organization and a network of authorized distributors worldwide. Geographically, our customers are located in North America, Latin America, Europe, the Middle East, Africa and Asia Pacific.

Consolidation – The Consolidated Financial Statements include the accounts of Tennant Company and its subsidiaries. All intercompany transactions and balances have been eliminated. In these Notes to the Consolidated Financial Statements, Tennant Company is referred to as “Tennant,” “we,” “us,” or “our.”

Translation of Non-U.S. Currency – Foreign currency-denominated assets and liabilities have been translated to U.S. dollars at year-end exchange rates, while income and expense items are translated at average exchange rates prevailing during the year. Gains or losses resulting from translation are included as a separate component of Shareholders’ Equity. The balance of cumulative foreign currency translation adjustments recorded within Accumulated Other Comprehensive Loss as of December 31, 2012, 2011 and 2010 was a net loss of $19,900, $20,286 and $17,145, respectively. Translation adjustments are not adjusted for income taxes as substantially all translation adjustments relate to permanent investments in non-U.S. subsidiaries. Net Foreign Currency Transaction (Losses) Gains are included in Other Income (Expense).

Use of Estimates – In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles, management must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses and the related disclosures, including disclosures of contingent assets and liabilities. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. 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. These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors that management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. A number of these factors include, among others, economic conditions, credit markets, foreign currency, commodity cost volatility and consumer spending and confidence, all of which have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual amounts could differ significantly from those estimated at the time the consolidated financial statements are prepared. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Cash and Cash Equivalents – We consider all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents.

Restricted Cash – We have a total of $187 that serves as collateral backing certain bank guarantees and is therefore restricted. This money is invested in time deposits.

Receivables – Credit is granted to our customers in the normal course of business. Receivables are recorded at original carrying value less reserves for estimated uncollectible accounts and sales returns. To assess the collectability of these receivables, we perform ongoing credit evaluations of our customers’ financial condition. Through these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations due to deterioration of its financial viability, credit ratings or bankruptcy. The reserve requirements are based on the best facts available to us and are reevaluated and adjusted as additional information becomes available. Our reserves are also based on amounts determined by using percentages applied to trade receivables. These percentages are determined by a variety of factors including, but not limited to, current economic trends, historical payment and bad debt write-off experience. An account is considered past-due or delinquent when it has not been paid within the contractual terms. Uncollectible accounts are written off against the reserves when it is deemed that a customer account is uncollectible.

Inventories – Inventories are valued at the lower of cost or market. 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.

Property, Plant and Equipment – Property, plant and equipment is carried at cost. Additions and improvements that extend the lives of the assets are capitalized while expenditures for repairs and maintenance are expensed as incurred. We generally depreciate buildings and improvements by the straight-line method over a life of 30 years. Other property, plant and equipment are generally depreciated using the straight-line method based on lives of 3 years to 15 years.

Goodwill – Goodwill represents the excess of cost over the fair value of net assets of businesses acquired. We analyze Goodwill on an annual basis as of year end and when an event occurs or circumstances change that may reduce the fair value of one of our reporting units below its carrying amount. A goodwill impairment occurs if the carrying amount of a reporting unit’s goodwill exceeds its fair value. In assessing the recoverability of Goodwill, in 2011 we began using an analysis of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Prior to 2011, in assessing the recoverability of Goodwill, we used a discounted cash flow model to estimate the reporting unit’s fair value to compare to its carrying amount. Management used judgment to develop assumptions for the discounted cash flow model including forecasting revenues and margins, estimating capital expenditures, depreciation, amortization and discount rates.

Intangible Assets – Intangible Assets consist of definite lived customer lists, service contracts, an acquired trade name and technology. Intangible Assets with a definite life are amortized on a straight-line basis.

Impairment of Long-lived Assets – 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. If impaired, an impairment loss is recognized based on the excess of the carrying amount of the individual asset group over its fair value.

Purchases of Common Stock – We repurchase our Common Stock under a 2011 and a 2012 repurchase program authorized by our Board of Directors. These programs allow us to repurchase up to 2,000,000 shares of our Common Stock. Upon repurchase, the par value is charged to Common Stock and the remaining purchase price is charged to Additional Paid-in Capital. If the amount of the remaining purchase price causes the Additional Paid-in Capital account to be in a debit position, this amount is then reclassified to Retained Earnings. Common Stock repurchased is included in shares authorized but is not included in shares outstanding.

Warranty – We record a liability for estimated warranty claims at the time of sale. The amount of the liability is based on the trend in the historical ratio of claims to sales, the historical length of time between the sale and resulting warranty claim, new product introductions and other factors. In the event we determine that our current or future product repair and replacement costs exceed our estimates, an adjustment to these reserves would be charged to earnings in the period such determination is made. Warranty terms on machines range from one to four years.

Environmental – We record a liability for environmental clean-up on an undiscounted basis when a loss is probable and can be reasonably estimated.

Pension and Profit Sharing Plans – We have pension and/or profit sharing plans covering substantially all of our employees. Pension plan costs are accrued based on actuarial estimates with the required pension cost funded annually, as needed. No new participants have entered the pension plan since 2000.

Postretirement Benefits – We accrue and recognize the cost of retiree health benefits over the employees’ period of service based on actuarial estimates. Benefits are only available for for U.S. employees hired before January 1, 1999.

Derivative Financial Instruments – We use derivative instruments to manage exposures to foreign currency only in an attempt to limit underlying exposures from currency fluctuations and not for trading purposes. We periodically enter into various contracts, principally forward exchange contracts, to protect the value of certain of our foreign currency-denominated assets and liabilities (principally the Euro, Australian and Canadian dollars, British pound, Japanese yen, Chinese yuan and Brazilian real). We have elected not to apply hedge accounting treatment to these contracts as our contracts are for a short duration. These contracts are marked-to-market with the related asset or liability recorded in Other Current Assets or Other Current Liabilities, as applicable. The gains and losses on these contracts generally approximate changes in the value of the related assets and liabilities. Gains or losses on forward foreign exchange contracts to economically hedge foreign currency-denominated net assets and liabilities are recognized in Other Income (Expense) under Net Foreign Currency Transaction (Losses) Gains within the Consolidated Statements of Earnings.

Revenue Recognition – We recognize revenue when persuasive evidence of an arrangement exists, title and risk of ownership have passed, the sales price is fixed or determinable and collectibility is reasonably assured. Generally, these criteria are met at the time the product is shipped. Provisions for estimated returns, rebates and discounts are provided for at the time the related revenue is recognized. Freight revenue billed to customers is included in Net Sales and the related shipping expense is included in Cost of Sales. Service revenue is recognized in the period the service is performed or ratably over the period of the related service contract.

Customers may obtain financing through third-party leasing companies to assist in their acquisition of our equipment products. Certain lease transactions classified as operating leases contain retained ownership provisions or guarantees, which results in recognition of revenue over the lease term. As a result, we defer the sale of these transactions and record the sales proceeds as collateralized borrowings or deferred revenue. The underlying equipment relating to operating leases is depreciated on a straight-line basis, not to exceed the equipment’s estimated useful life.

Revenues from contracts with multiple element arrangements are recognized as each element is earned. We offer service contracts in conjunction with equipment sales in addition to selling equipment and service contracts separately. Sales proceeds related to service contracts are deferred if the proceeds are received in advance of the service and recognized ratably over the contract period.

Share-based Compensation – We account for employee share-based compensation using the fair value based method. Our share-based compensation plans are more fully described in Note 15 of the Consolidated Financial Statements.

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. These efforts include tradeshows, online advertising, e-mail marketing, mailings, sponsorships and telemarketing. Advertising costs are expensed as incurred. In 2012, 2011 and 2010 such activities amounted to $6,466, $6,728 and $5,516, respectively.

Income Taxes – Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the book and tax bases of existing assets and liabilities. A valuation allowance is provided when, in management’s judgment, it is more likely than not that some portion or all of the deferred tax asset will not be realized. We have established contingent tax liabilities using management’s best judgment. We follow guidance provided by ASC 740, Income Taxes, regarding uncertainty in income taxes, to record these contingent tax liabilities (refer to Note 14 of the Consolidated Financial Statements for additional information). We adjust these liabilities as facts and circumstances change. Interest Expense is recognized in the first period the interest would begin accruing. Penalties are recognized in the period we claim or expect to claim the position in our tax return. Interest and penalties expenses are classified as an income tax expense.

Sales Tax –Sales taxes collected from customers and remitted to governmental authorities are presented on a net basis.

Earnings per Share – Basic earnings per share is computed by dividing Net Earnings by the Weighted Average Shares Outstanding during the period. Diluted earnings per share assume conversion of potentially dilutive stock options and restricted share awards. Performance-based shares are included in the calculation of diluted earnings per share in the quarter in which the performance targets have been achieved.

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Retirement Benefit Plans Part 2 (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Compensation and Retirement Disclosure [Abstract]
Number of participants in U.S. Pension Plan	447
Number of active employees participating in U.S. Pension Plan	102
Defined Benefit Plans and Other Postretirement Benefit Plans
Discretionary contribution made to pension plan	$ 15,000
Effect of one-percentage-point change in assumed healthcare cost trends
Effect of one-percentage-point decrease on total of service and interest cost components	(54)
Effect of one-percentage-point increase on total of service and interest cost components	61
Effect of one-percentage-point decrease on postretirement benefit obligation	(1,076)
Effect of one-percentage-point increase on postretirement benefit obligation	1,227
U.S. Pension Benenfits
Weighted-average assumptions used to determine benefit obligation
Discount rate	3.79%	4.39%
Rate of compensation increase	3.00%	3.00%
Weighted-average assumptions used to determine net periodic benefit costs
Discount rate	4.39%	5.39%	5.88%
Expected long-term rate of return on plan assets	7.70%	7.70%	7.70%
Rate of compensation increase	3.00%	3.00%	3.00%
Accumulated benefit obligations
Accumulated benefit obligations	46,907	42,909
Plans with accumulated benefit obligation in excess of plan assets
Projected benefit obligation	48,824	44,280
Accumulated benefit obligation	46,907	42,909
Fair value of plan assets	46,942	28,237
Change in benefit obligation:
Benefit obligation at beginning of year	44,280	38,885
Service cost	686	651	657
Interest cost	1,928	2,013	2,032
Plan participants' contributions	0	0
Plan amendments	0	233
Actuarial loss (gain)	3,893	4,216
Foreign exchange	0	0
Benefits paid	(1,963)	(1,718)
Benefit obligation at end of year	48,824	44,280	38,885
Change in fair value of plan assets and net accrued liabilities:
Fair value of plan assets at beginning of year	28,237	29,483
Actual return on plan assets	3,818	357
Employer contributions	16,850	115
Plan participants' contributions	0	0
Foreign exchange	0	0
Benefits paid	(1,963)	(1,718)
Fair value of plan assets at end of year	46,942	28,237	29,483
Funded status at end of year	(1,882)	(16,043)
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent Assets	698	0
Current liabilities	145	129
Noncurrent liabilities	2,435	15,914
Net accrued liability	1,882	16,043
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Prior service cost	224	606
Net actuarial loss	13,711	12,488
Accumulated other comprehensive income	13,935	13,094
Components of the net periodic benefit cost
Service cost	686	651	657
Interest cost	1,928	2,013	2,032
Expected return on plan assets	(2,279)	(2,325)	(2,340)
Amortization of net actuarial loss	1,131	27	22
Amortization of prior service cost	382	550	554
Foreign currency	0	0	0
Net periodic benefit cost	1,848	916	925
Changes in accumulated other comprehensive income:
Prior service cost	0	233	0
Net acuarial loss (gain)	2,355	6,184	573
Amortization of prior service cost	(382)	(550)	(554)
Amortization of prior transition asset	0	0	0
Amortization of net actuarial (loss) gain	(1,132)	(27)	(22)
Total recognized in other comprehensive income	841	5,840	(3)
Total recognized in net periodic benefit cost and other comprehensive income	2,689	6,756	922
Expected future benefit payments
2013	1,813
2014	2,057
2015	2,373
2016	2,544
2017	2,683
2018 to 2022	14,864
Total	26,334
U.S. Pension Benenfits | Equity Securities
Defined Benefit Plans and Other Postretirement Benefit Plans
Target allocation of investments	60.00%
U.S. Pension Benenfits | Debt Securities
Defined Benefit Plans and Other Postretirement Benefit Plans
Target allocation of investments	40.00%
U.S. Nonqualified Plan
Defined Benefit Plans and Other Postretirement Benefit Plans
Expected future employer contricutions in the next fiscal year	145
Postretirement Medical Benefits
Defined Benefit Plans and Other Postretirement Benefit Plans
Expected future employer contricutions in the next fiscal year	904
Weighted-average assumptions used to determine benefit obligation
Discount rate	3.27%	4.20%
Rate of compensation increase	0.00%	0.00%
Weighted-average assumptions used to determine net periodic benefit costs
Discount rate	4.20%	5.00%	5.60%
Expected long-term rate of return on plan assets	0.00%	0.00%	0.00%
Rate of compensation increase	0.00%	0.00%	0.00%
Assumed healthcare cost trend rates
Healthcare cost trend rate assumption for the next year	9.17%	10.14%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2031	2031
Change in benefit obligation:
Benefit obligation at beginning of year	13,708	13,423
Service cost	142	132	121
Interest cost	551	612	681
Plan participants' contributions	0	0
Plan amendments	0	0
Actuarial loss (gain)	926	72
Foreign exchange	0	0
Benefits paid	(1,237)	(531)
Benefit obligation at end of year	14,090	13,708	13,423
Change in fair value of plan assets and net accrued liabilities:
Fair value of plan assets at beginning of year	0	0
Actual return on plan assets	0	0
Employer contributions	1,237	531
Plan participants' contributions	0	0
Foreign exchange	0	0
Benefits paid	(1,237)	(531)
Fair value of plan assets at end of year	0	0	0
Funded status at end of year	(14,090)	(13,708)
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent Assets	0	0
Current liabilities	904	841
Noncurrent liabilities	13,186	12,867
Net accrued liability	14,090	13,708
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Prior service cost	(109)	(689)
Net actuarial loss	2,789	1,921
Accumulated other comprehensive income	2,680	1,232
Components of the net periodic benefit cost
Service cost	142	132	121
Interest cost	551	612	681
Expected return on plan assets	0	0	0
Amortization of net actuarial loss	57	0	0
Amortization of prior service cost	(580)	(580)	(579)
Foreign currency	0	0	0
Net periodic benefit cost	170	164	223
Changes in accumulated other comprehensive income:
Prior service cost	0	0	0
Net acuarial loss (gain)	926	72	(892)
Amortization of prior service cost	580	580	580
Amortization of prior transition asset	0	0	0
Amortization of net actuarial (loss) gain	(57)	0	0
Total recognized in other comprehensive income	1,449	652	(312)
Total recognized in net periodic benefit cost and other comprehensive income	1,619	816	(89)
Expected future benefit payments
2013	904
2014	977
2015	1,070
2016	1,150
2017	1,188
2018 to 2022	5,575
Total	10,864
Amounts that will be amortized from accumulated other comprehensive income (loss) in next fiscal year
Net loss	200
Net prior service cost (credit)	(103)
U.K. Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans
Expected future employer contricutions in the next fiscal year	234
Accumulated benefit obligations
Accumulated benefit obligations	8,837	7,858
German Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans
Expected future employer contricutions in the next fiscal year	39
Accumulated benefit obligations
Accumulated benefit obligations	878	652
Non-U.S. Pension Benefits
Weighted-average assumptions used to determine benefit obligation
Discount rate	4.41%	4.94%
Rate of compensation increase	4.50%	4.60%
Weighted-average assumptions used to determine net periodic benefit costs
Discount rate	4.94%	5.39%	5.69%
Expected long-term rate of return on plan assets	4.80%	5.20%	5.50%
Rate of compensation increase	4.60%	5.10%	5.10%
Plans with accumulated benefit obligation in excess of plan assets
Projected benefit obligation	10,011	8,775
Accumulated benefit obligation	9,715	8,510
Fair value of plan assets	8,855	7,738
Change in benefit obligation:
Benefit obligation at beginning of year	8,775	8,394
Service cost	138	133	117
Interest cost	437	465	434
Plan participants' contributions	24	24
Plan amendments	0	0
Actuarial loss (gain)	595	40
Foreign exchange	411	(63)
Benefits paid	(369)	(218)
Benefit obligation at end of year	10,011	8,775	8,394
Change in fair value of plan assets and net accrued liabilities:
Fair value of plan assets at beginning of year	7,738	6,917
Actual return on plan assets	738	715
Employer contributions	346	352
Plan participants' contributions	24	24
Foreign exchange	378	(52)
Benefits paid	(369)	(218)
Fair value of plan assets at end of year	8,855	7,738	6,917
Funded status at end of year	(1,156)	(1,037)
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent Assets	0	0
Current liabilities	39	38
Noncurrent liabilities	1,117	999
Net accrued liability	1,156	1,037
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Prior service cost	0	0
Net actuarial loss	246	2
Accumulated other comprehensive income	246	2
Components of the net periodic benefit cost
Service cost	138	133	117
Interest cost	437	465	434
Expected return on plan assets	(387)	(376)	(346)
Amortization of net actuarial loss	0	0	0
Amortization of prior service cost	0	0	0
Foreign currency	16	(18)	(65)
Net periodic benefit cost	204	204	140
Changes in accumulated other comprehensive income:
Prior service cost	0	0	0
Net acuarial loss (gain)	244	(300)	143
Amortization of prior service cost	0	0	0
Amortization of prior transition asset	0	0	0
Amortization of net actuarial (loss) gain	0	0	0
Total recognized in other comprehensive income	244	(300)	143
Total recognized in net periodic benefit cost and other comprehensive income	448	(96)	283
Expected future benefit payments
2013	211
2014	252
2015	257
2016	263
2017	304
2018 to 2022	1,966
Total	3,253
Pension Benefits
Amounts that will be amortized from accumulated other comprehensive income (loss) in next fiscal year
Net loss	1,754
Net prior service cost (credit)	$ 73

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Consolidated Quarterly Data

12 Months Ended

Dec. 31, 2012

Quarterly Financial Information Disclosure [Abstract]

Consolidated Quarterly Data

18. Consolidated Quarterly Data (Unaudited)

	2012
	Q1		Q2		Q3		Q4
Net Sales	$	173,712	$	199,493	$	178,268	$	187,507
Gross Profit	$	75,319	$	88,951	$	77,563	$	83,463
Net Earnings	$	5,324	$	13,671	$	8,745	$	13,844
Basic Earnings per Share	$	0.28	$	0.74	$	0.47	$	0.75
Diluted Earnings per Share	$	0.28	$	0.71	$	0.46	$	0.73

	2011
	Q1		Q2		Q3		Q4
Net Sales	$	172,591	$	201,259	$	186,990	$	193,158
Gross Profit	$	71,931	$	83,468	$	80,253	$	83,529
Net Earnings	$	5,866	$	5,855	$	9,728	$	11,264
Basic Earnings per Share	$	0.31	$	0.31	$	0.52	$	0.60
Diluted Earnings per Share	$	0.30	$	0.30	$	0.50	$	0.59

The summation of quarterly data may not equate to the calculation for the full fiscal year as quarterly calculations are performed on a discrete basis.

Regular quarterly dividends aggregated $0.69 per share in 2012, or $0.17 per share for the first three quarters of 2012 and $0.18 for the fourth quarter of 2012, and $0.68 per share in 2011, or $0.17 per quarter.

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair value measurements of assets and liabilities

Our population of assets and liabilities subject to fair value measurements at December 31, 2012 is as follows:

	Fair Value		Level 1		Level 2		Level 3
Assets:
Foreign currency forward exchange contracts	$	388	$	—	$	388	$	—
Total Assets	$	388	$	—	$	388	$	—
Liabilities:
Foreign currency forward exchange contracts	$	404	$	—	$	404	$	—
Total Liabilities	$	404	$	—	$	404	$	—

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Retirement Benefit Plans

12 Months Ended

Dec. 31, 2012

Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]

Retirement Benefit Plans

11. Retirement Benefit Plans

Substantially all U.S. employees are covered by various retirement benefit plans, including defined benefit pension plans, post-retirement medical plans and defined contribution savings plans. Retirement benefits for eligible employees in foreign locations are funded principally through defined benefit plans, annuity or government programs. The total cost of benefits for our plans was $11,078, $11,131 and $11,231 in 2012, 2011 and 2010, respectively.

We have a qualified, funded defined benefit retirement plan (the “U.S. Pension Plan”) in the U.S. covering certain current and retired employees. Plan benefits are based on the years of service and compensation during the highest five consecutive years of service in the final ten years of employment. No new participants have entered the plan since 2000. The plan has approximately 447 participants including 102 active employees as of December 31, 2012.

We have a U.S. postretirement medical benefit plan (the “U.S. Retiree Plan”) to provide certain healthcare benefits for U.S. employees hired before January 1, 1999. Eligibility for those benefits is based upon a combination of years of service with Tennant and age upon retirement.

Our defined contribution savings plan (“401(k)”) covers substantially all U.S. employees. Under this plan, we match up to 3% of the employee’s compensation in stock or cash to be invested per their election. Historically, matching contributions have been primarily funded by our ESOP Plan. However, as of December 31, 2009, all shares have been allocated. Starting in 2010, the matching contributions to the 401(k) are funded with cash. 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 $6,226, $6,864 and $7,073 during 2012, 2011 and 2010, respectively.

We have a U.S. nonqualified supplemental benefit plan (the “U.S. Nonqualified Plan”) to provide additional retirement benefits for certain employees whose benefits under our 401(k) plan or U.S. Pension Plan are limited by either the Employee Retirement Income Security Act or the Internal Revenue Code.

We also have defined pension benefit plans in the United Kingdom and Germany (the “U.K. Pension Plan” and the “German Pension Plan”). The U.K. Pension Plan and German Pension Plan cover certain current and retired employees and both plans are closed to new participants.

On March 23, 2010, the Patient Protection and Affordable Care Act (the “PPACA”) was signed into law, and, on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (the “HCERA” and, together with PPACA, the “Acts”), which makes various amendments to certain aspects of the PPACA, was signed into law. The Acts effectively change the tax treatment of federal subsidies paid to sponsors of retiree health benefit plans that provide prescription drug benefits that are at least actuarially equivalent to the corresponding benefits provided under Medicare Part D. Under the Acts, an employer’s income tax deduction for the costs of providing Medicare Part D-equivalent prescription drug benefits to retirees will be reduced by the amount of the federal subsidy beginning in 2013. Under U.S. GAAP, any impact from a change in tax law must be recognized in earnings in the period enacted regardless of the effective date. The Acts did not have a material impact on our financial position or results of operations.

During 2012 we made a $15,000 discretionary contribution to the U.S. Pension Plan in addition to the minimum funding requirements for 2011 and 2012. We expect to contribute approximately $145 to our U.S. Nonqualified Plan, $904 to our U.S. Retiree Plan, $234 to our U.K. Pension Plan and $39 to our German Pension Plan in 2013. No contributions to the U.S. Pension Plan are expected to be required during 2013.

Weighted-average asset allocations by asset category of the U.S. and U.K. Pension Plans as of December 31, 2012 are as follows:

Asset Category	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents	$	701	$	701	$	—	$	—
Equity Securities:
U.S. Small-Cap (1)	1,438		1,438		—		—
U.S. Mid-Cap (1)	2,266		2,266		—		—
International Small-Cap (2)	63		63		—		—
Mutual Funds:
Corporate Bonds	18,671		18,671		—		—
U.S. Large-Cap (3)	18,141		18,141		—		—
International Large-Cap (4)	5,662		5,662		—		—
Investment Account held by Pension Plan (5)	8,855		—		8,855		—
Total	$	55,797	$	46,942	$	8,855	$	—

(1) This category is comprised of actively managed domestic common stocks.

(2) This category is comprised of actively managed international common stocks.

(3) This category is comprised of funds not actively managed that track the S&P 500.

(4) This category is comprised of funds not actively managed that are invested in foreign and domestic equities.

(5) This category is comprised of foreign and domestic equities and foreign and domestic fixed interest assets.

The primary objective of our U.S. and U.K. Pension Plans is to meet retirement income commitments to plan participants at a reasonable cost to Tennant and to maintain a sound actuarially funded status. This objective is accomplished through growth of capital and safety of funds invested. The pension plan 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. The target allocation for the U.S. Pension Plan is 60% equity and 40% debt securities. Equity securities within the U.S. Pension Plan do not include any direct investments in Tennant Company Common Stock. The U.K. Pension Plan is invested in an insurance contract with underlying investments primarily in equity and fixed income securities. Our German Pension Plan is unfunded, which is customary in that country. The expected return on assets assumption on the investment portfolios for the pension and other postretirement benefit 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.

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

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Postretirement Medical Benefits
	2012		2011		2012		2011		2012		2011
Discount rate	3.79	%	4.39	%	4.41	%	4.94	%	3.27	%	4.20	%
Rate of compensation increase	3.00	%	3.00	%	4.50	%	4.60	%	—		—

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

	U.S. Pension Benefits						Non-U.S. Pension Benefits						Postretirement Medical Benefits
	2012		2011		2010		2012		2011		2010		2012		2011		2010
Discount rate	4.39	%	5.39	%	5.88	%	4.94	%	5.39	%	5.69	%	4.20	%	5.00	%	5.60	%
Expected long-term rate of return on plan assets	7.70	%	7.70	%	7.70	%	4.80	%	5.20	%	5.50	%	—		—		—
Rate of compensation increase	3.00	%	3.00	%	3.00	%	4.60	%	5.10	%	5.10	%	—		—		—

The discount rate is used to discount future benefit obligations back to today’s dollars. Our discount rates were determined based on high-quality fixed income investments. The resulting discount rates are consistent with the duration of plan liabilities. The Citigroup Above Median Yield Curve is used in determining the discount rate for the U.S. Plans.

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

	2012		2011
U.S. Pension Plans	$	46,907	$	42,909
U.K. Pension Plan	8,837		7,858
German Pension Plan	878		652

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

	U.S. Pension Plans				Non-U.S. Plans
	2012		2011		2012		2011
Projected benefit obligation	$	48,824	$	44,280	$	10,011	$	8,775
Accumulated benefit obligation	46,907		42,909		9,715		8,510
Fair value of plan assets	46,942		28,237		8,855		7,738

As of December 31, 2012 the U.S Nonqualified and the German Pension Plans had an accumulated benefit obligation in excess of plan assets. As of December 31, 2011, the U.S. Pension Plan, the U.S. Nonqualified, U.K. Pension and German Pension Plans had an accumulated benefit obligation in excess of plan assets.

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

	2012		2011
Healthcare cost trend rate assumption for the next year	9.17	%	10.14	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2031		2031

Assumed healthcare cost trend rates have a significant effect on the amounts reported for healthcare plans. To illustrate, a one-percentage-point change in assumed healthcare cost trends would have the following effects:

	1-Percentage- Point Decrease			1-Percentage- Point Increase
Effect on total of service and interest cost components	$	(54	)	$	61
Effect on postretirement benefit obligation	$	(1,076	)	$	1,227

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:

	U.S. Pension Benefits						Non-U.S. Pension Benefits						Postretirement Medical Benefits
	2012			2011			2012			2011			2012			2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	44,280		$	38,885		$	8,775		$	8,394		$	13,708		$	13,423
Service cost	686			651			138			133			142			132
Interest cost	1,928			2,013			437			465			551			612
Plan participants' contributions	—			—			24			24			—			—
Plan amendments	—			233			—			—			—			—
Actuarial loss	3,893			4,216			595			40			926			72
Foreign exchange	—			—			411			(63		)	—			—
Benefits paid	(1,963		)	(1,718		)	(369		)	(218		)	(1,237		)	(531		)
Benefit obligation at end of year	$	48,824		$	44,280		$	10,011		$	8,775		$	14,090		$	13,708
Change in fair value of plan assets and net accrued liabilities:
Fair value of plan assets at beginning of year	$	28,237		$	29,483		$	7,738		$	6,917		$	—		$	—
Actual return on plan assets	3,818			357			738			715			—			—
Employer contributions	16,850			115			346			352			1,237			531
Plan participants' contributions	—			—			24			24			—			—
Foreign exchange	—			—			378			(52		)	—			—
Benefits paid	(1,963		)	(1,718		)	(369		)	(218		)	(1,237		)	(531		)
Fair value of plan assets at end of year	46,942			28,237			8,855			7,738			—			—
Funded status at end of year	$	(1,882	)	$	(16,043	)	$	(1,156	)	$	(1,037	)	$	(14,090	)	$	(13,708	)
Amounts recognized in the consolidated balance sheets consist of:
Noncurrent Assets	$	698		$	—		$	—		$	—		$	—		$	—
Current liabilities	145			129			39			38			904			841
Noncurrent liabilities	2,435			15,914			1,117			999			13,186			12,867
Net accrued liability	$	1,882		$	16,043		$	1,156		$	1,037		$	14,090		$	13,708
Amounts recognized in accumulated other comprehensive income (loss) consist of:
Prior service cost	$	224		$	606		$	—		$	—		$	(109	)	$	(689	)
Net actuarial loss	13,711			12,488			246			2			2,789			1,921
Accumulated other comprehensive income	$	13,935		$	13,094		$	246		$	2		$	2,680		$	1,232

The components of the net periodic benefit cost for the three years ended December 31, were as follows:

	U.S. Pension Benefits									Non-U.S. Pension Benefits									Postretirement Medical Benefits
	2012			2011			2010			2012			2011			2010			2012			2011			2010
Service cost	$	686		$	651		$	657		$	138		$	133		$	117		$	142		$	132		$	121
Interest cost	1,928			2,013			2,032			437			465			434			551			612			681
Expected return on plan assets	(2,279		)	(2,325		)	(2,340		)	(387		)	(376		)	(346		)	—			—			—
Amortization of net actuarial loss	1,131			27			22			—			—			—			57			—			—
Amortization of prior service cost	382			550			554			—			—			—			(580		)	(580		)	(579		)
Foreign currency	—			—			—			16			(18		)	(65		)	—			—			—
Net periodic benefit cost	$	1,848		$	916		$	925		$	204		$	204		$	140		$	170		$	164		$	223

The changes in accumulated other comprehensive income for the three years ended December 31, were as follows:

	U.S. Pension Benefits									Non-U.S. Pension Benefits							Postretirement Medical Benefits
	2012			2011			2010			2012		2011			2010		2012			2011		2010
Prior service cost	$	—		$	233		$	—		$	—	$	—		$	—	$	—		$	—	$	—
Net actuarial loss (gain)	2,355			6,184			573			244		(300		)	143		926			72		(892		)
Amortization of prior service cost	(382		)	(550		)	(554		)	—		—			—		580			580		580
Amortization of prior transition asset	—			—			—			—		—			—		—			—		—
Amortization of net actuarial (loss) gain	(1,132		)	(27		)	(22		)	—		—			—		(57		)	—		—
Total recognized in other comprehensive income	$	841		$	5,840		$	(3	)	$	244	$	(300	)	$	143	$	1,449		$	652	$	(312	)
Total recognized in net periodic benefit cost and other comprehensive income	$	2,689		$	6,756		$	922		$	448	$	(96	)	$	283	$	1,619		$	816	$	(89	)

The following benefit payments, which reflect expected future service, are expected to be paid for our U.S. and Non-U.S. plans:

	U.S. Pension Benefits		Non-U.S. Pension Benefits		Postretirement Medical Benefits
2013	$	1,813	$	211	$	904
2014	2,057		252		977
2015	2,373		257		1,070
2016	2,544		263		1,150
2017	2,683		304		1,188
2018 to 2022	14,864		1,966		5,575
Total	$	26,334	$	3,253	$	10,864

The following amounts are included in accumulated other comprehensive income as of December 31, 2012 and are expected to be recognized as components of net periodic benefit cost during 2013:

	Pension Benefits		Postretirement Medical Benefits
Net loss	$	1,754	$	200
Net prior service cost (credit)	73		(103		)