v3.26.1
Derivatives
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
We report all derivative instruments as either assets or liabilities in our consolidated balance sheets at fair value. As a global organization, we are exposed to market risks, including fluctuations in foreign currency exchange rates and interest rates. To manage the volatility associated with these exposures, we enter into derivative instruments from time to time in accordance with our risk management policies.
We designate instruments as hedges on a transaction basis to support hedge accounting when the applicable criteria are met. The changes in fair value on these hedging instruments are intended to offset, in part or in whole, the corresponding changes in the fair value or cash flows of the underlying exposures being hedged.
Gains and losses resulting from changes in fair value are accounted for based on the nature and use of the derivative and whether it is designed and qualifies for hedge accounting.
We assess hedge effectiveness at the inception of the hedging relationship and on an ongoing basis, both prospectively and retrospectively, in accordance with our policy. Any ineffective portion of a hedging instrument is recorded in the same line item of the consolidated statements of income as the item being hedged.
Our hedging policy also establishes maximum limits for each counterparty to reduce concentration of credit risk. We do not purchase, hold, or sell derivative financial instruments for trading purposes.
Cash Flow Hedges
The Company manages exposure to variability in cash flows related to its floating rate debt through the use of interest rate swaps. As of June 30, 2026, the Company had interest rate swaps with an aggregate notional amount of $120.0 million that effectively convert a portion of its variable rate debt to a fixed interest rate of 3.443%.
The interest rate swaps are designated as cash flow hedges under ASC 815. Changes in the fair value of the swaps, net of tax, are recorded in accumulated other comprehensive loss and are reclassified to interest expense, net, in the periods in which the hedged interest payments affect earnings. The swaps are scheduled to mature on October 1, 2029.
Fair Value Hedges
On April 5, 2022, we entered into Euro to U.S. dollar foreign exchange cross-currency swaps associated with an intercompany loan to a wholly owned European subsidiary. We enter into these foreign exchange cross-currency swaps to hedge the foreign currency risk associated with this intercompany loan, and accordingly, they are not speculative in nature. These cross-currency swaps are designated as fair value hedges.
As of June 30, 2026 and December 31, 2025, these cross-currency swaps included €75.0 million of total notional value. As of June 30, 2026, the aggregated scheduled interest payments over the course of the loan and related swaps amounted to €1.9 million. These swaps are scheduled to mature in April 2027.
Net Investment Hedges
On April 5, 2022, we entered into Euro to U.S. dollar foreign exchange cross-currency swaps to hedge our exposure to adverse foreign currency exchange rate movements between Tennant Company and its European subsidiaries. We enter into these fixed-to-fixed cross-currency swap agreements to protect a designated monetary amount of the Company’s net investment in its Euro functional currency subsidiaries against the risk of changes in the Euro to U.S. dollar foreign exchange rate. These cross-currency swaps are designated as net investment hedges.
As of June 30, 2026 and December 31, 2025, the cross-currency swaps included €75.0 million of total notional value. These swaps are scheduled to mature in April 2027.
Foreign Currency Forward Contracts Not Designated as Hedges
We hedge our net recognized foreign currency denominated assets and liabilities with foreign currency forward contracts to reduce the risk that the value of these assets and liabilities will be adversely affected by changes in exchange rates. These contracts hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value as either assets or liabilities on the consolidated balance sheets with changes in the fair value recorded to net foreign currency transaction gain (loss) in our consolidated statements of income. These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged.
At June 30, 2026 and December 31, 2025, the notional amounts of foreign currency forward contracts outstanding not designated as hedging instruments were $94.6 million and $92.9 million, respectively.
Balance Sheet Classification
Derivatives are classified as either current or non-current assets or liabilities based on their anticipated settlement dates.
The following table summarizes the location and respective fair values of the Company's derivative financial instruments on a gross basis:
June 30, 2026
Other Current AssetsOther Current LiabilitiesOther AssetsOther Liabilities
Derivatives designated as cash flow hedges:
Interest rate swaps$0.5 $— $1.0 $— 
Derivatives designated as fair value hedges:
Cross-currency swaps0.1 5.6 — — 
Derivatives designated as net investment hedges:
Cross-currency swaps0.1 5.6 — — 
Derivatives not designated as hedging instruments:
Foreign currency forward contracts1.3 0.1 — — 
December 31, 2025
Other Current AssetsOther Current LiabilitiesOther AssetsOther Liabilities
Derivatives designated as cash flow hedges:
Interest rate swaps$— $— $— $0.4 
Derivatives designated as fair value hedges:
Cross-currency swaps1.2 — — 8.9 
Derivatives designated as net investment hedges:
Cross-currency swaps1.2 — — 8.9 
Derivatives not designated as hedging instruments:
Foreign currency forward contracts0.3 0.1 — — 
The amount of the gains and losses on hedging instruments and the classification of those gains and losses within our consolidated financial statements for the three and six months ended June 30, 2026 were as follows. Gains and losses on hedging instruments are located within interest expense, net on our consolidated income statements.
Gain (Loss) Recognized in Accumulated Other Comprehensive Loss, net of taxGain (Loss) Reclassified into Income
Three Months Ended
June 30,		Three Months Ended
June 30,
2026202520262025
Derivatives designated as cash flow hedges:
Interest rate swaps$1.1 $— $(0.1)$— 
Derivatives designated as fair value hedges:
Cross-currency swaps— (2.6)0.3 (2.5)
Derivatives designated as net investment hedges:
Cross-currency swaps0.7 (2.3)0.3 3.0 
Gain (Loss) Recognized in Accumulated Other Comprehensive IncomeGain (Loss) Reclassified into Income
Six Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Derivatives designated as cash flow hedges:
Interest rate swaps$1.7 $(0.4)$(0.1)$0.1 
Derivatives designated as fair value hedges:
Cross-currency swaps0.3 (1.9)0.5 (2.2)
Derivatives designated as net investment hedges:
Cross-currency swaps2.1 (4.2)0.5 3.2 
The amount of gains and losses on derivative instruments not designated as hedging instruments and the classification of those gains and losses within our consolidated financial statements during the three and six months ended June 30, 2026 were as follows. Gains and losses on foreign currency forward contracts not designated as hedging instruments were reclassified into income as net foreign currency transaction gains or losses.
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Derivatives not designated as hedging instruments:
Foreign currency forward contracts$(1.6)$(5.6)$(0.2)$(8.1)
During the next twelve-month period, net (losses) gains expected to be reclassified into earnings are shown below:
Interest rate swaps$0.5 
Cross-currency swaps1.0 
Total$1.5 
Such losses will be reclassified at the time that the underlying hedged transactions are realized.