10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended: September 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:  1-12936

TITAN INTERNATIONAL, INC.

(Exact name of Registrant as specified in its Charter)

Illinois	36-3228472
(State of Incorporation)	(I.R.S. Employer Identification No.)

2701 Spruce Street, Quincy, IL 62301

(Address of principal executive offices, including Zip Code)

(217) 228-6011

(Registrant’s telephone number, including area code)

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 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.  Yes þ  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or 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 o	Accelerated filer þ
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o  No þ

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

	Shares Outstanding at
Class	October 31, 2011
Common stock, no par value per share	42,202,681

TITAN INTERNATIONAL, INC.

TABLE OF CONTENTS

		Page
Part I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2011 and 2010	1
	Consolidated Condensed Balance Sheets as of September 30, 2011, and December 31, 2010	2
	Consolidated Condensed Statement of Changes in Equity for the Nine Months Ended September 30, 2011	3
	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010	4
	Notes to Consolidated Condensed Financial Statements	5-24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25-42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
Part II.	Other Information
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 6.	Exhibits	44
	Signatures	45

PART I.  FINANCIAL INFORMATION

Item 1.             Financial Statements

TITAN INTERNATIONAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in thousands, except earnings per share data)

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Net sales	$	398,805		$	222,818		$	1,084,081		$	648,922
Cost of sales		345,811			194,872			910,481			560,986
Gross profit		52,994			27,946			173,600			87,936
Selling, general & administrative expenses		8,548			12,037			50,414			36,008
Research and development expenses		796			1,112			2,993			5,039
Royalty expense		2,263			2,275			7,530			6,809
Income from operations		41,387			12,522			112,663			40,080
Interest expense		(6,616	)		(5,867	)		(19,045	)		(19,713	)
Noncash convertible debt conversion charge		0			0			(16,135	)		0
Loss on senior note repurchase		0			(473	)		0			(3,195	)
Other income (expense)		(556	)		401			1,907			307
Income before income taxes		34,215			6,583			79,390			17,479
Provision for income taxes		12,690			2,568			35,345			6,817
Net income		21,525			4,015			44,045			10,662
Net income attributable to noncontrolling interests		362			0			354			0
Net income attributable to Titan	$	21,163		$	4,015		$	43,691		$	10,662
Earnings per common share:
Basic	$	.50		$	.12		$	1.05		$	.31
Diluted		.42			.11			.89			.30
Average common shares outstanding:
Basic		42,028			34,868			41,512			34,819
Diluted		53,061			51,773			52,970			51,740
Dividends declared per common share:	$	.005		$	.005		$	.015		$	.015

See accompanying Notes to Consolidated Condensed Financial Statements.

1

TITAN INTERNATIONAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands, except share data)

	September 30,			December 31,
	2011			2010
Assets				As Restated
Current assets:
Cash and cash equivalents	$	94,274		$	239,500
Marketable securities		28,129			5
Accounts receivable		213,884			89,004
Inventories		183,150			118,143
Deferred income taxes		16,887			16,040
Prepaid and other current assets		31,082			18,658
Total current assets		567,406			481,350
Property, plant and equipment, net		333,575			248,054
Other assets		110,233			51,476
Total assets	$	1,011,214		$	780,880
Liabilities and Equity
Current liabilities:
Short-term debt	$	8,227		$	0
Accounts payable		98,898			35,281
Other current liabilities		88,542			57,072
Total current liabilities		195,667			92,353
Long-term debt		317,881			373,564
Deferred income taxes		37,080			1,664
Other long-term liabilities		68,234			41,268
Total liabilities		618,862			508,849
Equity:
Titan stockholder’s equity:
Common stock(no par, 120,000,000 shares authorized, 44,092,997 and 37,475,288 issued, respectively)		37			30
Additional paid-in capital		378,881			300,540
Retained earnings		52,803			9,744
Treasury stock (at cost, 1,899,304 and 2,108,561 shares, respectively)		(17,446	)		(19,324	)
Treasury stock reserved for deferred compensation		(1,233	)		(1,917	)
Accumulated other comprehensive loss		(22,973	)		(17,042	)
Total Titan stockholders’ equity		390,069			272,031
Noncontrolling interests		2,283			0
Total equity		392,352			272,031
Total liabilities and equity	$	1,011,214		$	780,880

See accompanying Notes to Consolidated Condensed Financial Statements.

2

TITAN INTERNATIONAL, INC.

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

(All amounts in thousands, except share data)

	Number of common shares		Common Stock		Additional paid-in capital			Retained earnings			Treasury stock			Treasury stock reserved for deferred compensation			Accumulated other comprehensive income (loss)			Total Titan			Noncontrolling interest		Total
Balance January 1, 2011 (as restated)		#35,366,727	$	30	$	300,540		$	9,744		$	(19,324	)	$	(1,917	)	$	(17,042	)	$	272,031		$	0	$	272,031
Comprehensive income:
Net income									43,691												43,691			354		44,045
Currency translation adjustment																		(9,929	)		(9,929	)				(9,929	)
Pension liability adjustments, net of tax																		1,779			1,779					1,779
Unrealized gain on investments, net of tax																		2,219			2,219					2,219
Comprehensive income																					37,760			354		38,114
Dividends on common stock									(632	)											(632	)				(632	)
Note conversion		6,617,709		7		73,902															73,909					73,909
Exercise of stock options		66,375				(119	)					596									477					477
Acquisitions		125,524				1,708						1,127									2,835			1,929		4,764
Stock-based compensation						1,748															1,748					1,748
Deferred compensation transactions						846									684						1,530					1,530
Issuance of treasury stock under 401(k) plan		17,358				256						155									411					411
Balance September 30, 2011		#42,193,693	$	37	$	378,881		$	52,803		$	(17,446	)	$	(1,233	)	$	(22,973	)	$	390,069		$	2,283	$	392,352

See accompanying Notes to Consolidated Condensed Financial Statements.

3

TITAN INTERNATIONAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in thousands)

	Nine months ended
	September 30,
	2011			2010
Cash flows from operating activities:
Net income	$	44,045		$	10,662
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization		32,753			27,617
Deferred income tax provision		8,038			8,043
Noncash convertible debt conversion charge		16,135			0
Stock-based compensation		1,748			0
Issuance of treasury stock under 401(k) plan		411			382
Gain on acquisition		(919	)		0
Loss on senior note repurchase		0			3,195
(Increase) decrease in current assets, net of acquisitions:
Accounts receivable		(132,294	)		(46,627	)
Inventories		(47,366	)		(25,840	)
Prepaid and other current assets		(9,456	)		6,451
Other assets		2,870			(458	)
Increase (decrease) in current liabilities, net of acquisitions:
Accounts payable		69,540			22,889
Other current liabilities		10,224			(1,740	)
Other liabilities		(7,412	)		3,074
Net cash provided by (used for) operating activities		(11,683	)		7,648
Cash flows from investing activities:
Capital expenditures		(17,901	)		(20,056	)
Acquisitions, net of cash acquired		(99,118	)		0
Purchases of marketable securities		(30,000	)		0
Other		1,941			91
Net cash used for investing activities		(145,078	)		(19,965	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(1,064	)		(56,674	)
Payment on debt		(629	)		0
Term loan borrowing		14,148			0
Proceeds from exercise of stock options		477			240
Payment of financing fees		0			(586	)
Dividends paid		(598	)		(530	)
Net cash provided by (used for) financing activities		12,334			(57,550	)
Effect of exchange rate changes on cash		(799	)		0
Net decrease in cash and cash equivalents		(145,226	)		(69,867	)
Cash and cash equivalents at beginning of period		239,500			229,182
Cash and cash equivalents at end of period	$	94,274		$	159,315

See accompanying Notes to Consolidated Condensed Financial Statements.

4

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

1.  ACCOUNTING POLICIES

In the opinion of Titan International, Inc. (Titan or the Company), the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature and necessary for a fair statement of the Company’s financial position as of September 30, 2011, the results of operations for the three and nine months ended September 30, 2011 and 2010, and cash flows for the nine months ended September 30, 2011 and 2010.

Accounting policies have continued without significant change and are described in the Description of Business and Significant Accounting Policies contained in the Company’s 2010 Annual Report on Form 10-K.  These interim financial statements have been prepared pursuant to the Securities and Exchange Commission’s rules for Form 10-Q’s and, therefore, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2010 Annual Report on Form 10-K.

Sales

Sales and revenues are presented net of sales taxes and other related taxes.

Marketable securities

The Company reports investments in marketable securities classified as available-for-sale at fair value.  Unrealized gains or losses on available-for-sale marketable securities are reported, net of tax, as a component of other comprehensive income.  For unrealized losses which are determined to be other-than-temporary, the loss is recorded as a component of other income (loss).  Realized gains and losses on marketable securities are recorded as a component of other income (loss).

Fair value of financial instruments

The Company records all financial instruments, including cash and cash equivalents, accounts receivable, notes receivable, accounts payable, other accruals and notes payable at cost, which approximates fair value.  Investments in marketable equity securities are recorded at fair value.  The senior secured 7.875% notes due 2017 (senior secured notes) and convertible senior subordinated 5.625% notes due 2017 (convertible notes) are carried at cost of $200.0 million and $112.9 million at September 30, 2011, respectively.  The fair value of these notes at September 30, 2011, as obtained through independent pricing sources, was approximately $210.0 million for the senior secured notes and approximately $192.4 million for the convertible notes.  The increase in the fair value of the convertible notes is due primarily to the increased value of the underlying common stock.

Cash dividends

The Company declared cash dividends of $.005 and $.015 per share of common stock for each of the three and nine months ended September 30, 2011 and 2010.  The third quarter 2011 cash dividend of $.005 per share of common stock was paid October 15, 2011, to stockholders of record on September 30, 2011.

Restatement

The Company amended its 2010 Annual Report on Form 10-K on November 9, 2011 to restate its December 31, 2010 consolidated financial statements.  The December 31, 2010 condensed balance sheet in this Form 10-Q includes the effect of this restatement.  For additional information, see the Form 10-K/A filed on November 9, 2011.

5

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

2. ACQUISITIONS

Acquisition of AII Holding, Inc.

On April 1, 2011, Titan purchased a 70% controlling interest in AII Holding, Inc. (AII) for $1.3 million of Titan stock and payment of $2.3 million for AII’s debt.  The fair value of the identified assets acquired less liabilities assumed exceeded the fair value of the consideration transferred and noncontrolling interest.  Therefore, a bargain purchase gain of $0.9 million was recorded on the transaction.  

Acquisition of Goodyear’s Latin American Farm Tire Business

On April 1, 2011, Titan closed on the acquisition of The Goodyear Tire & Rubber Company’s (Goodyear) Latin American farm tire business for approximately $98.6 million U.S. dollars, subject to post-closing conditions and adjustments.  In addition, there were approximately $1.3 million of acquisition related costs recorded as selling, general and administrative costs during the nine months ended September 30, 2011.  The transaction includes Goodyear’s Sao Paulo, Brazil manufacturing plant, property, equipment; inventories; a licensing agreement that allows Titan to sell Goodyear-brand farm tires in Latin America for seven years; and extends the North American licensing agreement for seven years.  Net sales and net income before taxes from the acquisition date included in the statement of operations was $185.9 million and $11.5 million, respectively.

The Company funded the acquisition with cash on hand.  The purchase price was allocated to the assets acquired and liabilities assumed based on their fair values.  Inventory was valued using the comparative sales method.  Real and personal property was valued at fair value.  The excess of the purchase price over the identifiable assets acquired and liabilities assumed was reflected as goodwill.  The goodwill was allocated to the agricultural segment.  The Company continues to evaluate the preliminary purchase price allocation, primarily the value of certain deferred taxes and goodwill, and may revise the purchase price allocation in future periods as these estimates are finalized.

The preliminary purchase price allocation of the Latin American farm tire business consisted of the following  (in thousands):

Cash	$	1,018
Inventories		14,562
Prepaid & other current assets		4,929
Property, plant & equipment		108,905
Goodwill		21,388
Other assets		39,263
Other current liabilities		(21,127	)
Deferred income taxes		(29,477	)
Other noncurrent liabilities		(40,823	)
Net assets acquired	$	98,638

The preliminary purchase price allocation includes $42.5 million for prepaid royalty.  The prepaid royalty is for a seven year period and was calculated using a 2% royalty discounted at a 10% rate.  The prepaid royalty and discount will be amortized over the seven year period of the agreement.  The current portion of the prepaid royalty was $3.9 million and is included in prepaid & other current assets.  The noncurrent portion of the prepaid royalty was $38.6 million and is included in other assets.  At September 30, 2011, the current balance of the prepaid royalty was $4.1 million and the noncurrent balance of the prepaid royalty was $35.0 million.

The preliminary purchase price allocation includes $53.9 million for supply agreement liability which was valued using the incremental income method.  The supply agreement liability was recorded as the supply agreements are for sales at below market prices.  The liability will be amortized with an offset to cost of sales over the three year life of the agreement.  The current portion of the supply agreement was $18.0 million and is included in other current liabilities.  The noncurrent portion of the supply agreement was $35.9 million and is included in other noncurrent liabilities.  At September 30, 2011, the current balance of the supply agreement liability was $15.8 million and the noncurrent balance of the supply agreement liability was $23.6 million.

6

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Pro forma financial information

The following unaudited pro forma financial information gives effect to the acquisition of Goodyear’s Latin American farm tire business as if the acquisition had taken place on January 1, 2010.  The pro forma financial information for the Sao Paulo, Brazil manufacturing facility was derived from The Goodyear Tire & Rubber Company’s historical accounting records.  These amounts have been calculated by adjusting the historical results of the Sao Paulo, Brazil facility to reflect the additional depreciation and the amortization of the prepaid royalty discount and supply agreement liability assuming the fair value adjustments had taken place.

Pro forma financial information for the three and nine months ended September 30, 2011 and 2010, is as follows :

(in thousands, except per share data)	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net sales	$	398,805	$	250,818	$	1,112,481	$	732,922
Net income		21,525		8,936		48,175		25,426
Net income attributable to Titan		21,163		8,936		47,821		25,426
Basic earnings per share	$	.50	$	.26	$	1.15	$	.73
Diluted earnings per share		.42		.20		.95		.58

The pro forma information is presented for illustrative purposes only and may not be indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2010, nor is it necessarily indicative of Titan’s future consolidated results of operations or financial position.

3.  MARKETABLE SECURITIES

Marketable securities are recorded at fair value and consisted of the following (in thousands):

	As of September 30, 2011
			Unrealized		Unrealized			Recorded
	Cost		Gains		Losses			Basis
Money market funds	$	6	$	0	$	0		$	6
Preferred stocks		2,551		0		(156	)		2,395
Common stocks		27,444		229		(1,945	)		25,728
Total	$	30,001	$	229	$	(2,101	)	$	28,129

4.  ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following (in thousands):

	September 30,			December 31,
	2011			2010
Accounts receivable	$	218,250		$	92,893
Allowance for doubtful accounts		(4,366	)		(3,889	)
Accounts receivable, net	$	213,884		$	89,004

7

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

5.  INVENTORIES

Inventories consisted of the following (in thousands):

	September 30,			December 31,
	2011			2010
				As Restated
Raw materials	$	97,419		$	56,414
Work-in-process		28,458			16,860
Finished goods		68,470			49,841
		194,347			123,115
Adjustment to LIFO basis		(11,197	)		(4,972	)
	$	183,150		$	118,143

At September 30, 2011, approximately 32% of the Company’s inventories were valued under the last-in, first-out (LIFO) method.  At December 31, 2010, approximately 39% of the Company’s inventories were valued under the LIFO method.  The remaining inventories were valued under the first-in, first-out (FIFO) method or average cost method.  All inventories are valued at lower of cost or market.

6.  PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following (in thousands):

	September 30,			December 31,
	2011			2010
Land and improvements	$	19,416		$	3,061
Buildings and improvements		118,320			98,233
Machinery and equipment		452,638			383,231
Tools, dies and molds		87,230			84,134
Construction-in-process		13,580			8,741
		691,184			577,400
Less accumulated depreciation		(357,609	)		(329,346	)
	$	333,575		$	248,054

Depreciation on fixed assets for the three months ended September 30, 2011 and 2010, totaled $11.1 million and $8.4 million, respectively.  Depreciation on fixed assets for the nine months ended September 30, 2011 and 2010, totaled $31.4 million and $25.7 million, respectively.

8

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

7.  INVESTMENT IN TITAN EUROPE PLC

Investment in Titan Europe Plc consisted of the following (in thousands):

	September 30,		December 31,
	2011		2010
Investment in Titan Europe Plc	$	27,979	$	22,693

Titan Europe Plc is publicly traded on the AIM market in London, England.  The Company’s investment in Titan Europe represents a 21.8% ownership percentage.  The Company has considered the applicable guidance in Accounting Standards Codification (ASC) 323 Investments – Equity Method and Joint Ventures and has concluded that the Company’s investment in Titan Europe Plc should be accounted for as an available-for-sale security and recorded at fair value in accordance with ASC 320 Investments – Debt and Equity Securities as the Company does not have significant influence over Titan Europe Plc.  The investment in Titan Europe Plc is included as a component of other assets on the Consolidated Condensed Balance Sheets.  Titan’s cost basis in Titan Europe Plc is $5.0 million.  Titan’s accumulated other comprehensive income includes a gain on the Titan Europe Plc investment of $14.9 million, which is net of tax of $8.0 million.  The increased value in the Titan Europe Plc investment at September 30, 2011, was due primarily to a higher publicly quoted Titan Europe Plc market price.

8.  GOODWILL

Changes in goodwill consisted of the following (in thousands):

	2011			2010
Agricultural segment
Goodwill balance, January 1	$	0		$	0
Acquisitions		21,388			0
Foreign currency translation		(2,640	)		0
Goodwill balance, September 30	$	18,748		$	0

The Company’s goodwill balance is related to the acquisition of Goodyear’s Latin American farm tire business which included the Sao Paulo, Brazil manufacturing facility.  The Company is in the process of finalizing the preliminary purchase price allocation for the acquisition.  The final amount of goodwill recorded on this transaction may be adjusted based on the finalized purchase price allocation.  Goodwill is included as a component of other assets in the Consolidated Condensed Balance Sheets.

9.  WARRANTY

Changes in the warranty liability consisted of the following (in thousands):

	2011			2010
Warranty liability, January 1	$	12,471		$	9,169
Provision for warranty liabilities		18,052			12,469
Warranty payments made		(14,979	)		(11,181	)
Warranty liability, September 30	$	15,544		$	10,457

The Company provides limited warranties on workmanship on its products in all market segments.  The majority of the Company’s products have a limited warranty that ranges from zero to ten years, with certain products being prorated after the first year.  The Company calculates a provision for warranty expense based on past warranty experience.  Warranty accruals are included as a component of other current liabilities on the Consolidated Condensed Balance Sheets.

9

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

10.  REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

	September 30,		December 31,
	2011		2010
7.875% senior notes due 2017	$	200,000	$	200,000
5.625% convertible senior notes due 2017		112,881		172,500
Other debt		13,227		0
8% senior unsecured notes due January 2012		0		1,064
		326,108		373,564
Less:  Amounts due within one year		8,227		0
	$	317,881	$	373,564

Aggregate maturities of long-term debt at September 30, 2011, were as follows (in thousands):

October 1 – December 31, 2011	$	8,227
2012		0
2013		5,000
2014		0
2015		0
Thereafter		312,881
	$	326,108

7.875% senior secured notes due 2017

The Company’s 7.875% senior secured notes (senior secured notes) are due October 2017.  These notes are secured by the land and buildings of the following subsidiaries of the Company:  Titan Tire Corporation, Titan Wheel Corporation of Illinois, Titan Tire Corporation of Freeport, and Titan Tire Corporation of Bryan.  The Company’s senior secured notes outstanding balance was $200.0 million at September 30, 2011.

5.625% convertible senior subordinated notes due 2017

The Company’s 5.625% convertible senior subordinated notes (convertible notes) are due January 2017.  The initial base conversion rate for the convertible notes is 93.0016 shares of Titan common stock per $1,000 principal amount of convertible notes, equivalent to an initial base conversion price of approximately $10.75 per share of Titan common stock.  If the price of Titan common stock at the time of determination exceeds the base conversion price, the base conversion rate will be increased by an additional number of shares (up to 9.3002 shares of Titan common stock per $1,000 principal amount of convertible notes) as determined pursuant to a formula described in the indenture.  The base conversion rate will be subject to adjustment in certain events.  The Company’s convertible notes balance was $112.9 million at September 30, 2011.

In the first quarter of 2011, the Company closed an Exchange Agreement with a note holder of the convertible notes, pursuant to which such holder converted approximately $59.6 million in aggregate principal amount of the Convertible Notes into approximately 6.6 million shares of the Company’s common stock, plus a payment for the accrued and unpaid interest.  In connection with the exchange, the Company recognized a noncash charge of $16.1 million in accordance with ASC 470-20 Debt – Debt with Conversion and Other Options.

8% senior unsecured notes due 2012

In the first quarter of 2011, Titan satisfied and discharged the indenture relating to the 8% senior unsecured notes due January 2012 by depositing with the trustee $1.1 million cash representing the outstanding principal of such notes and interest payments due on July 15, 2011, and at maturity on January 15, 2012.  Titan irrevocably instructed the trustee to apply the deposited money toward the interest and principal of the notes.

10

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

Revolving credit facility

The Company’s $100 million revolving credit facility (credit facility) with agent Bank of America, N.A. has a January 2014 termination date and is collateralized by the accounts receivable and inventory of Titan and certain of its domestic subsidiaries.  During the first nine months of 2011 and at September 30, 2011, there were no borrowings under the credit facility.  Outstanding letters of credit were $12.0 million at September 30, 2011, leaving $88.0 million of unused availability on the credit facility.  The credit facility contains certain financial covenants, restrictions and other customary affirmative and negative covenants.  Titan is in compliance with these covenants and restrictions as of September 30, 2011.

Other debt

Brazil Term Loan

In May 2011, the Company entered into a two-year, unsecured $10.0 million Term Loan with Bank of America, N.A. (BoA term loan) to provide working capital for the Sao Paolo, Brazil manufacturing facility.  Borrowings under the BoA term loan bear interest at a rate equal to LIBOR plus 200 basis points.  The BoA term loan shall be a minimum of $5.0 million with the option for an additional $5.0 million loan for a maximum of $10.0 million.  The BoA loan is due May 2013.  The Company entered into an interest rate swap agreement and cross currency swap transaction with Bank of America Merrill Lynch Banco Multiplo S.A. that is designed to convert the outstanding $5.0 million US Dollar based LIBOR loan to a Brazilian Real based CDI loan.    See Note 11 for additional information.  As of September 30, 2011, the Company had $5.0 million outstanding on this loan and the interest rate including the effect of the swap agreement was approximately 14%.

Brazil Revolving Line of Credit

The Company’s wholly-owned Brazilian subsidiary, Titan Pneus Do Brasil Ltda (Titan Brazil), has a revolving line of credit (Brazil line of credit) established with Bank of America Merrill Lynch Banco Multiplo S.A. in May 2011 that is secured by a $12.0 million line of credit between the Company and Bank of America N.A. under the $100.0 million credit facility.  Titan Brazil could borrow up to 16.0 million Brazilian Reais, which equates to approximately $8.6 million dollars as of September 30, 2011, for working capital purposes.  Under the terms of the Brazil line of credit, borrowings, if any, bear interest at a rate of LIBOR plus 247 basis points.  At September 30, 2011 there was $7.8 million outstanding and the interest rate was approximately 3%.

11.  DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses a financial derivative to mitigate its exposure to volatility in the interest rate and foreign currency exchange rate in Brazil.  The Company uses this derivate instrument to hedge exposure in the ordinary course of business and does not invest in derivative instruments for speculative purposes.  In order to reduce interest rate and foreign currency risk on the BoA Term Loan, the Company entered into an interest rate swap agreement and cross currency swap transaction with Bank of America Merrill Lynch Banco Multiplo S.A. that is designed to convert the outstanding $5.0 million US Dollar based LIBOR loan to a Brazilian Real based CDI loan.  The Company has not designated this agreement as a hedging instrument.  Changes in the fair value of the cross currency swap are recorded in other income (expense) and changes in the fair value of the interest rate swap agreement are recorded as interest expense (or gain as an offset to interest expense).  For the three months ended September 30, 2011, the Company recorded interest expense of $0.1 million related to this derivative.  For the nine months ended September 30, 2011, the Company recorded interest expense of $0.2 million related to this derivative.

11

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

12.  LEASE COMMITMENTS

The Company leases certain buildings and equipment under operating leases.  Certain lease agreements provide for renewal options, fair value purchase options, and payment of property taxes, maintenance and insurance by the Company.

At September 30, 2011, future minimum commitments under noncancellable operating leases with initial or remaining terms of at least one year were as follows (in thousands):

October 1 – December 31, 2011	$	174
2012		395
2013		343
2014		244
Thereafter		0
Total future minimum lease payments	$	1,156

13.  EMPLOYEE BENEFIT PLANS

The Company has three frozen defined benefit pension plans and one defined benefit plan that previously purchased a final annuity settlement.  The Company also sponsors four 401(k) retirement savings plans.  The Company expects to contribute approximately $0.6 million to the frozen pension plans during the remainder of 2011.

The components of net periodic pension cost consisted of the following (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Interest cost	$	1,272		$	1,300		$	3,816		$	3,900
Expected return on assets		(1,314	)		(1,227	)		(3,944	)		(3,681	)
Amortization of unrecognized prior service cost		34			34			102			102
Amortization of unrecognized deferred taxes		(14	)		(14	)		(42	)		(42	)
Amortization of net unrecognized loss		937			907			2,809			2,721
Net periodic pension cost	$	915		$	1,000		$	2,741		$	3,000

14.  ROYALTY EXPENSE

The Company has a trademark license agreement with Goodyear to manufacture and sell certain off-highway tires in North America and Latin America under the Goodyear name.  The North American and Latin American royalties were prepaid for seven years as a part of the Goodyear Latin American farm tire acquisition.  Royalty expenses recorded were $2.3 million and $2.3 million for the quarters ended September 30, 2011 and 2010, respectively.  Royalty expenses were $7.5 million and $6.8 million for the nine months ended September 30, 2011 and 2010, respectively.

12

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

15.  OTHER INCOME

Other income consisted of the following (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Discount amortization on prepaid royalty	$	1,041		$	0		$	2,120		$	0
Gain on purchase transaction		0			0			919			0
Interest income		119			92			357			266
Investment gain (loss) on contractual obligations		(1,255	)		638			(1,111	)		285
Other expense		(461	)		(329	)		(378	)		(244	)
	$	(556	)	$	401		$	1,907		$	307

16.  INCOME TAXES

The Company recorded income tax expense of $12.7 million and $35.3 million for the three and nine months ended September 30, 2011, respectively, as compared to $2.6 million and $6.8 million for the three and nine months ended September 30, 2010.  The Company’s effective income tax rate was 45% and 39% for the nine months ended September 30, 2011 and 2010, respectively.  The Company’s 2011 income tax expense and rate differs from the amount of income tax determined by applying the U.S Federal income tax rate to pre-tax income primarily as a result of the $16.1 million noncash charge taken in connection with the exchange agreement on the Company’s convertible debt.  This noncash charge is not fully deductible for income tax purposes.

17.  COMPREHENSIVE INCOME

Comprehensive income consisted of the following (in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2011			2010		2011			2010
Net income attributable to Titan	$	21,163		$	4,015	$	43,691		$	10,662
Unrealized gain (loss) on investments, net of tax		(11,433	)		5,137		2,219			8,405
Currency translation adjustment		(12,861	)		0		(9,929	)		0
Pension liability adjustments, net of tax		594			575		1,779			1,724
Comprehensive income (loss) attributable to Titan		(2,537	)		9,727		37,760			20,791
Net income attributable to noncontrolling interests		362			0		354			0
	$	(2,175	)	$	9,727	$	38,114		$	20,791

13

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

18.  SEGMENT INFORMATION

The table below presents information about certain revenues and income from operations used by the chief operating decision maker of the Company for the three and nine months ended September 30, 2011 and 2010 (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Revenues from external customers
Agricultural	$	246,456		$	170,675		$	713,721		$	497,503
Earthmoving/construction		81,078			47,848			224,484			139,161
Consumer		71,271			4,295			145,876			12,258
	$	398,805		$	222,818		$	1,084,081		$	648,922
Gross profit
Agricultural	$	39,008		$	25,283		$	133,874		$	78,201
Earthmoving/construction		8,814			2,495			28,227			10,294
Consumer		5,812			827			13,567			2,302
Unallocated corporate		(640	)		(659	)		(2,068	)		(2,861	)
	$	52,994		$	27,946		$	173,600		$	87,936
Income from operations
Agricultural	$	34,580		$	21,440		$	120,248		$	66,222
Earthmoving/construction		7,418			1,077			23,408			4,080
Consumer		3,615			734			9,352			2,030
Unallocated corporate		(4,226	)		(10,729	)		(40,345	)		(32,252	)
Income from operations		41,387			12,522			112,663			40,080
Interest expense		(6,616	)		(5,867	)		(19,045	)		(19,713	)
Noncash debt charge		0			0			(16,135	)		0
Loss on senior note repurchase		0			(473	)		0			(3,195	)
Other income (expense)		(556	)		401			1,907			307
Income before income taxes	$	34,215		$	6,583		$	79,390		$	17,479

Assets by segment were as follows (in thousands):

	September 30,		December 31,
Total Assets	2011		2010
			As Restated
Agricultural segment	$	464,908	$	304,048
Earthmoving/construction segment		192,956		171,410
Consumer segment		146,741		5,863
Unallocated corporate		206,609		299,559
	$	1,011,214	$	780,880

14

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

19.  EARNINGS PER SHARE

Earnings per share (EPS) are as follows (amounts in thousands, except per share data):

	Three months ended,
	September 30, 2011						September 30, 2010
	Titan Net Income		Weighted average shares		Per share amount		Titan Net Income		Weighted average shares		Per share amount
Basic EPS	$	21,163		42,028	$	.50	$	4,015		34,868	$	.12
Effect of stock options/trusts		0		238				0		529
Effect of convertible notes		1,091		10,795				1,598		16,376
Diluted EPS	$	22,254		53,061	$	.42	$	5,613		51,773	$	.11

	Nine months ended,
	September 30, 2011						September 30, 2010
	Titan Net Income		Weighted average shares		Per share amount		Titan Net Income		Weighted average shares		Per share amount
Basic EPS	$	43,691		41,512	$	1.05	$	10,662		34,819	$	.31
Effect of stock options/trusts		0		287				0		545
Effect of convertible notes		3,385		11,171				4,827		16,376
Diluted EPS	$	47,076		52,970	$	.89	$	15,489		51,740	$	.30

There were no stock options/trusts or convertible notes that were antidilutive for the periods presented.

20.  FAIR VALUE MEASUREMENTS

ASC 820 Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers are defined as:

Level 1 – Quoted prices in active markets for identical instruments;

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable.

Level 3 – Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis consisted of the following (in thousands):

	September 30, 2011						December 31, 2010
	Total		Level 1		Levels 2&3		Total		Level 1		Levels 2&3
Marketable securities	$	28,129	$	28,129	$	0	$	0	$	0	$	0
Investment in Titan Europe Plc		27,979		27,979		0		22,693		22,693		0
Investments for contractual obligations		11,585		11,585		0		11,168		11,168		0
Total	$	67,693	$	67,693	$	0	$	33,861	$	33,861	$	0

15

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

21.  RECENTLY ISSUED ACCOUNTING STANDARDS

Business Combinations

In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-29, “Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations.”  This update addresses diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations.  The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  The amendments in this update were effective prospectively for business combinations for which the acquisition date was on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.  The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows.

Fair Value Measurement

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  This update establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS).  The amendments in this update are effective during interim and annual periods beginning after December 15, 2011.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Comprehensive Income

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income.”  The objective of this update is to improve the comparability, consistency, and transparency of financial reporting to increase the prominence of items reported in other comprehensive income.  This update requires that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements.  The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Goodwill Impairment Testing

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles–Goodwill and Other (Topic 350) – Testing Goodwill for Impairment.”  The objective of this update is to simplify how entities test goodwill for impairment.  The amendments in the update permit an entity to first assess 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 described in Topic 350.  The amendments in this update are effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  Early adoption is permitted.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

16

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

22.  LITIGATION

The Company is a party to routine legal proceedings arising out of the normal course of business.  Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes at this time that none of these actions, individually or in the aggregate, will have a material adverse affect on the consolidated financial condition, results of operations or cash flows of the Company.  However, due to the difficult nature of predicting unresolved and future legal claims, the Company cannot anticipate or predict the material adverse effect on its consolidated financial condition, results of operations or cash flows as a result of efforts to comply with or its liabilities pertaining to legal judgments.

17

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

23.  SUBSIDIARY GUARANTOR FINANCIAL INFORMATION

The Company’s 5.625% convertible senior subordinated notes are guaranteed by the following 100% owned subsidiaries of the Company:  Titan Tire Corporation, Titan Tire Corporation of Bryan, Titan Tire Corporation of Freeport, Titan Tire Corporation of Texas, Titan Wheel Corporation of Illinois, and Titan Wheel Corporation of Virginia.  The note guarantees are full and unconditional, joint and several obligations of the guarantors.  The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions.  The following condensed consolidating financial statements are presented using the equity method of accounting for the parent and guarantor subsidiaries.  Certain sales & marketing expenses recorded by non-guarantor subsidiaries have not been allocated to the guarantor subsidiaries.

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	299,695		$	99,110		$	0		$	398,805
Cost of sales		380			255,509			89,922			0			345,811
Gross profit (loss)		(380	)		44,186			9,188			0			52,994
Selling, general and administrative expenses		(4,443	)		2,467			10,524			0			8,548
Research and development expenses		0			796			0			0			796
Royalty expense		0			1,620			643			0			2,263
Income (loss) from operations		4,063			39,303			(1,979	)		0			41,387
Interest expense		(6,114	)		0			(502	)		0			(6,616	)
Other income (expense)		(552	)		5			(9	)		0			(556	)
Income (loss) before income taxes		(2,603	)		39,308			(2,490	)		0			34,215
Provision (benefit) for income taxes		(988	)		14,605			(927	)		0			12,690
Equity in earnings of subsidiaries		23,140			(127	)		127			(23,140	)		0
Net income (loss)		21,525			24,576			(1,436	)		(23,140	)		21,525
Net income attributable to noncontrolling interests		0			0			0			362			362
Net income (loss) attributable to Titan	$	21,525		$	24,576		$	(1,436	)	$	(23,502	)	$	21,163

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	222,818		$	0		$	0		$	222,818
Cost of sales		387			194,077			408			0			194,872
Gross profit (loss)		(387	)		28,741			(408	)		0			27,946
Selling, general and administrative expenses		4,843			1,967			5,227			0			12,037
Research and development expenses		0			1,112			0			0			1,112
Royalty expense		0			2,275			0			0			2,275
Income (loss) from operations		(5,230	)		23,387			(5,635	)		0			12,522
Interest expense		(5,867	)		0			0			0			(5,867	)
Loss on senior note repurchase		(473	)		0			0			0			(473	)
Other income (expense)		377			4			20			0			401
Income (loss) before income taxes		(11,193	)		23,391			(5,615	)		0			6,583
Provision (benefit) for income taxes		(4,366	)		9,123			(2,189	)		0			2,568
Equity in earnings of subsidiaries		10,842			(69	)		69			(10,842	)		0
Net income (loss)	$	4,015		$	14,199		$	(3,357	)	$	(10,842	)	$	4,015

18

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	890,916		$	193,165		$	0		$	1,084,081
Cost of sales		1,282			733,379			175,820			0			910,481
Gross profit (loss)		(1,282	)		157,537			17,345			0			173,600
Selling, general and administrative expenses		15,513			7,654			27,247			0			50,414
Research and development expenses		4			2,989			0			0			2,993
Royalty expense		0			6,304			1,226			0			7,530
Income (loss) from operations		(16,799	)		140,590			(11,128	)		0			112,663
Interest expense		(18,426	)		0			(619	)		0			(19,045	)
Noncash convertible debt conversion charge		(16,135	)		0			0			0			(16,135	)
Other income (expense)		1,644			(236	)		499			0			1,907
Income (loss) before income taxes		(49,716	)		140,354			(11,248	)		0			79,390
Provision (benefit) for income taxes		(12,424	)		51,931			(4,162	)		0			35,345
Equity in earnings of subsidiaries		81,337			(260	)		260			(81,337	)		0
Net income (loss)		44,045			88,163			(6,826	)		(81,337	)		44,045
Net income attributable to noncontrolling interests		0			0			0			354			354
Net income (loss) attributable to Titan	$	44,045		$	88,163		$	(6,826	)	$	(81,691	)	$	43,691

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	648,922		$	0		$	0		$	648,922
Cost of sales		1,996			557,649			1,341			0			560,986
Gross profit (loss)		(1,996	)		91,273			(1,341	)		0			87,936
Selling, general and administrative expenses		14,624			6,617			14,767			0			36,008
Research and development expenses		0			5,039			0			0			5,039
Royalty expense		0			6,809			0			0			6,809
Income (loss) from operations		(16,620	)		72,808			(16,108	)		0			40,080
Interest expense		(19,713	)		0			0			0			(19,713	)
Loss on senior note repurchase		(3,195	)		0			0			0			(3,195	)
Other income		203			15			89			0			307
Income (loss) before income taxes		(39,325	)		72,823			(16,019	)		0			17,479
Provision (benefit) for income taxes		(15,337	)		28,401			(6,247	)		0			6,817
Equity in earnings of subsidiaries		34,650			(234	)		234			(34,650	)		0
Net income (loss)	$	10,662		$	44,188		$	(9,538	)	$	(34,650	)	$	10,662

19

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

	Consolidating Condensed Balance Sheets
(Amounts in thousands)
	September 30, 2011
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	87,932		$	8	$	6,334		$	0		$	94,274
Marketable securities		28,129			0		0			0			28,129
Accounts receivable		0			155,642		58,242			0			213,884
Inventories		0			157,659		25,491			0			183,150
Prepaid and other current assets		26,164			16,662		5,143			0			47,969
Total current assets		142,225			329,971		95,210			0			567,406
Property, plant and equipment, net		10,641			222,741		100,193			0			333,575
Investment in subsidiaries		167,434			9,057		20			(176,511	)		0
Other assets		45,174			957		64,102			0			110,233
Total assets	$	365,474		$	562,726	$	259,525		$	(176,511	)	$	1,011,214
Liabilities and Equity
Short-term debt	$	0		$	0	$	8,227		$	0		$	8,227
Accounts payable		1,976			50,008		46,914			0			98,898
Other current liabilities		15,384			41,888		31,270			0			88,542
Total current liabilities		17,360			91,896		86,411			0			195,667
Long-term debt		312,881			0		5,000			0			317,881
Other long-term liabilities		19,735			25,945		59,634			0			105,314
Intercompany accounts		(374,571	)		182,898		191,673			0			0
Titan stockholders’ equity		390,069			261,987		(83,193	)		(178,794	)		390,069
Noncontrolling interests		0			0		0			2,283			2,283
Total liabilities and equity	$	365,474		$	562,726	$	259,525		$	(176,511	)	$	1,011,214

	Consolidating Condensed Balance Sheets
(Amounts in thousands)	December 31, 2010
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
	As Restated			As Restated					As Restated			As Restated
Assets
Cash and cash equivalents	$	239,362		$	6	$	132		$	0		$	239,500
Accounts receivable		0			89,004		0			0			89,004
Inventories		0			118,143		0			0			118,143
Prepaid and other current assets		17,981			16,240		482			0			34,703
Total current assets		257,343			223,393		614			0			481,350
Property, plant and equipment, net		7,678			235,143		5,233			0			248,054
Investment in subsidiaries		33,464			9,057		20			(42,541	)		0
Other assets		22,183			869		28,424			0			51,476
Total assets	$	320,668		$	468,462	$	34,291		$	(42,541	)	$	780,880
Liabilities and Stockholders’ Equity
Accounts payable	$	1,406		$	33,473	$	402		$	0		$	35,281
Other current liabilities		16,066			39,186		1,820			0			57,072
Total current liabilities		17,472			72,659		2,222			0			92,353
Long-term debt		373,564			0		0			0			373,564
Other long-term liabilities		8,855			28,083		5,994			0			42,932
Intercompany accounts		(351,254	)		174,326		176,928			0			0
Stockholders’ equity		272,031			193,394		(150,853	)		(42,541	)		272,031
Total liabilities and stockholders’ equity	$	320,668		$	468,462	$	34,291		$	(42,541	)	$	780,880

20

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(18,544	)	$	12,085		$	(5,224	)	$	(11,683	)
Cash flows from investing activities:
Capital expenditures		(2,583	)		(13,514	)		(1,804	)		(17,901	)
Acquisitions, net of cash acquired		(99,118	)		0			0			(99,118	)
Purchases of marketable securities		(30,000	)		0			0			(30,000	)
Other, net		0			1,431			510			1,941
Net cash used for investing activities		(131,701	)		(12,083	)		(1,294	)		(145,078	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(1,064	)		0			0			(1,064	)
Payment on debt		0			0			(629	)		(629	)
Term loan borrowing		0			0			14,148			14,148
Proceeds from exercise of stock options		477			0			0			477
Dividends paid		(598	)		0			0			(598	)
Net cash provided by (used for) financing activities		(1,185	)		0			13,519			12,334
Effect of exchange rate changes on cash		0			0			(799	)		(799	)
Net increase (decrease) in cash and cash equivalents		(151,430	)		2			6,202			(145,226	)
Cash and cash equivalents, beginning of period		239,362			6			132			239,500
Cash and cash equivalents, end of period	$	87,932		$	8		$	6,334		$	94,274

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(10,887	)	$	18,294		$	241		$	7,648
Cash flows from investing activities:
Capital expenditures		(1,409	)		(18,353	)		(294	)		(20,056	)
Other, net		0			72			19			91
Net cash used for investing activities		(1,409	)		(18,281	)		(275	)		(19,965	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(56,674	)		0			0			(56,674	)
Payment of financing fees		(586	)		0			0			(586	)
Proceeds from exercise of stock options		240			0			0			240
Dividends paid		(530	)		0			0			(530	)
Net cash used for financing activities		(57,550	)		0			0			(57,550	)
Net increase (decrease) in cash and cash equivalents		(69,846	)		13			(34	)		(69,867	)
Cash and cash equivalents, beginning of period		229,004			11			167			229,182
Cash and cash equivalents, end of period	$	159,158		$	24		$	133		$	159,315

21

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

24.  SUBSIDIARY GUARANTOR FINANCIAL INFORMATION

The Company’s 7.875% senior secured notes are guaranteed by the following 100% owned subsidiaries of the Company:  Titan Tire Corporation, Titan Tire Corporation of Bryan, Titan Tire Corporation of Freeport, and Titan Wheel Corporation of Illinois.  The note guarantees are full and unconditional, joint and several obligations of the guarantors.  The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions.  The following condensed consolidating financial statements are presented using the equity method of accounting for the parent and guarantor subsidiaries.  Certain sales & marketing expenses recorded by non-guarantor subsidiaries have not been allocated to the guarantor subsidiaries.

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	293,991		$	104,814		$	0		$	398,805
Cost of sales		380			250,021			95,410			0			345,811
Gross profit (loss)		(380	)		43,970			9,404			0			52,994
Selling, general and administrative expenses		(4,443	)		2,366			10,625			0			8,548
Research and development expenses		0			796			0			0			796
Royalty expense		0			1,620			643			0			2,263
Income (loss) from operations		4,063			39,188			(1,864	)		0			41,387
Interest expense		(6,114	)		0			(502	)		0			(6,616	)
Other income (expense)		(552	)		(212	)		208			0			(556	)
Income (loss) before income taxes		(2,603	)		38,976			(2,158	)		0			34,215
Provision (benefit) for income taxes		(988	)		14,482			(804	)		0			12,690
Equity in earnings of subsidiaries		23,140			(127	)		127			(23,140	)		0
Net income (loss)		21,525			24,367			(1,227	)		(23,140	)		21,525
Net income attributable to noncontrolling interests		0			0			0			362			362
Net income (loss) attributable to Titan	$	21,525		$	24,367		$	(1,227	)	$	(23,502	)	$	21,163

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	218,551		$	4,267		$	0		$	222,818
Cost of sales		387			189,528			4,957			0			194,872
Gross profit (loss)		(387	)		29,023			(690	)		0			27,946
Selling, general and administrative expenses		4,843			1,904			5,290			0			12,037
Research and development expenses		0			1,058			54			0			1,112
Royalty expense		0			2,275			0			0			2,275
Income (loss) from operations		(5,230	)		23,786			(6,034	)		0			12,522
Interest expense		(5,867	)		0			0			0			(5,867	)
Loss on senior note repurchase		(473	)		0			0			0			(473	)
Other income (expense)		377			(9	)		33			0			401
Income (loss) before income taxes		(11,193	)		23,777			(6,001	)		0			6,583
Provision (benefit) for income taxes		(4,366	)		9,273			(2,339	)		0			2,568
Equity in earnings of subsidiaries		10,842			(69	)		69			(10,842	)		0
Net income (loss)	$	4,015		$	14,435		$	(3,593	)	$	(10,842	)	$	4,015

22

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	873,352		$	210,729		$	0		$	1,084,081
Cost of sales		1,282			716,572			192,627			0			910,481
Gross profit (loss)		(1,282	)		156,780			18,102			0			173,600
Selling, general and administrative expenses		15,513			7,372			27,529			0			50,414
Research and development expenses		4			2,982			7			0			2,993
Royalty expense		0			6,304			1,226			0			7,530
Income (loss) from operations		(16,799	)		140,122			(10,660	)		0			112,663
Interest expense		(18,426	)		0			(619	)		0			(19,045	)
Noncash convertible debt conversion charge		(16,135	)		0			0			0			(16,135	)
Other income (expense)		1,644			(493	)		756			0			1,907
Income (loss) before income taxes		(49,716	)		139,629			(10,523	)		0			79,390
Provision (benefit) for income taxes		(12,424	)		51,663			(3,894	)		0			35,345
Equity in earnings of subsidiaries		81,337			(260	)		260			(81,337	)		0
Net income (loss)		44,045			87,706			(6,369	)		(81,337	)		44,045
Net income attributable to noncontrolling interests		0			0			0			354			354
Net income (loss) attributable to Titan	$	44,045		$	87,706		$	(6,369	)	$	(81,691	)	$	43,691

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	636,172		$	12,750		$	0		$	648,922
Cost of sales		1,996			542,351			16,639			0			560,986
Gross profit (loss)		(1,996	)		93,821			(3,889	)		0			87,936
Selling, general and administrative expenses		14,624			6,401			14,983			0			36,008
Research and development expenses		0			4,912			127			0			5,039
Royalty expense		0			6,809			0			0			6,809
Income (loss) from operations		(16,620	)		75,699			(18,999	)		0			40,080
Interest expense		(19,713	)		0			0			0			(19,713	)
Loss on senior note repurchase		(3,195	)		0			0			0			(3,195	)
Other income		203			31			73			0			307
Income (loss) before income taxes		(39,325	)		75,730			(18,926	)		0			17,479
Provision (benefit) for income taxes		(15,337	)		29,535			(7,381	)		0			6,817
Equity in earnings of subsidiaries		34,650			(234	)		234			(34,650	)		0
Net income (loss)	$	10,662		$	45,961		$	(11,311	)	$	(34,650	)	$	10,662

23

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

	Consolidating Condensed Balance Sheets
(Amounts in thousands)
	September 30, 2011
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	87,932		$	5	$	6,337		$	0		$	94,274
Marketable securities		28,129			0		0			0			28,129
Accounts receivable		0			151,751		62,133			0			213,884
Inventories		0			140,544		42,606			0			183,150
Prepaid and other current assets		26,164			16,219		5,586			0			47,969
Total current assets		142,225			308,519		116,662			0			567,406
Property, plant and equipment, net		10,641			207,672		115,262			0			333,575
Investment in subsidiaries		167,434			9,057		10			(176,501	)		0
Other assets		45,174			957		64,102			0			110,233
Total assets	$	365,474		$	526,205	$	296,036		$	(176,501	)	$	1,011,214
Liabilities and Equity
Short-term debt	$	0		$	0	$	8,227		$	0		$	8,227
Accounts payable		1,976			48,621		48,301			0			98,898
Other current liabilities		15,384			41,083		32,075			0			88,542
Total current liabilities		17,360			89,704		88,603			0			195,667
Long-term debt		312,881			0		5,000			0			317,881
Other long-term liabilities		19,735			25,883		59,696			0			105,314
Intercompany accounts		(374,571	)		113,090		261,481			0			0
Titan stockholders’ equity		390,069			297,528		(118,744	)		(178,784	)		390,069
Noncontrolling interests		0			0		0			2,283			2,283
Total liabilities and equity	$	365,474		$	526,205	$	296,036		$	(176,501	)	$	1,011,214

	Consolidating Condensed Balance Sheets
(Amounts in thousands)	December 31, 2010
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
	As Restated			As Restated					As Restated			As Restated
Assets
Cash and cash equivalents	$	239,362		$	3	$	135		$	0		$	239,500
Accounts receivable		0			85,335		3,669			0			89,004
Inventories		0			103,265		14,878			0			118,143
Prepaid and other current assets		17,981			15,937		785			0			34,703
Total current assets		257,343			204,540		19,467			0			481,350
Property, plant and equipment, net		7,678			218,999		21,377			0			248,054
Investment in subsidiaries		33,464			9,057		10			(42,531	)		0
Other assets		22,183			869		28,424			0			51,476
Total assets	$	320,668		$	433,465	$	69,278		$	(42,531	)	$	780,880
Liabilities and Stockholders’ Equity
Accounts payable	$	1,406		$	32,305	$	1,570		$	0		$	35,281
Other current liabilities		16,066			38,689		2,317			0			57,072
Total current liabilities		17,472			70,994		3,887			0			92,353
Long-term debt		373,564			0		0			0			373,564
Other long-term liabilities		8,855			28,083		5,994			0			42,932
Intercompany accounts		(351,254	)		106,523		244,731			0			0
Stockholders’ equity		272,031			227,865		(185,334	)		(42,531	)		272,031
Total liabilities and stockholders’ equity	$	320,668		$	433,465	$	69,278		$	(42,531	)	$	780,880

24

TITAN INTERNATIONAL, INC.

Notes to Consolidated Condensed Financial Statements

(Unaudited)

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(18,544	)	$	11,757		$	(4,896	)	$	(11,683	)
Cash flows from investing activities:
Capital expenditures		(2,583	)		(13,186	)		(2,132	)		(17,901	)
Acquisitions, net of cash acquired		(99,118	)		0			0			(99,118	)
Purchases of marketable securities		(30,000	)		0			0			(30,000	)
Other, net		0			1,431			510			1,941
Net cash used for investing activities		(131,701	)		(11,755	)		(1,622	)		(145,078	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(1,064	)		0			0			(1,064	)
Payment on debt		0			0			(629	)		(629	)
Term loan borrowing		0			0			14,148			14,148
Proceeds from exercise of stock options		477			0			0			477
Dividends paid		(598	)		0			0			(598	)
Net cash provided by (used for) financing activities		(1,185	)		0			13,519			12,334
Effect of exchange rate changes on cash		0			0			(799	)		(799	)
Net increase (decrease) in cash and cash equivalents		(151,430	)		2			6,202			(145,226	)
Cash and cash equivalents, beginning of period		239,362			3			135			239,500
Cash and cash equivalents, end of period	$	87,932		$	5		$	6,337		$	94,274

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(10,887	)	$	18,091		$	444		$	7,648
Cash flows from investing activities:
Capital expenditures		(1,409	)		(18,118	)		(529	)		(20,056	)
Other, net		0			42			49			91
Net cash used for investing activities		(1,409	)		(18,076	)		(480	)		(19,965	)
Cash flows from financing activities:
Repurchase of senior notes		(56,674	)		0			0			(56,674	)
Proceeds from exercise of stock options		240			0			0			240
Payment of financing fees		(586	)		0			0			(586	)
Dividends paid		(530	)		0			0			(530	)
Net cash used for financing activities		(57,550	)		0			0			(57,550	)
Net increase (decrease) in cash and cash equivalents		(69,846	)		15			(36	)		(69,867	)
Cash and cash equivalents, beginning of period		229,004			8			170			229,182
Cash and cash equivalents, end of period	$	159,158		$	23		$	134		$	159,315

25

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Item 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS

Management’s discussion and analysis of financial condition and results of operations (MD&A) is designed to provide a reader of these financial statements with a narrative from the perspective of the management of Titan International, Inc. (Titan or the Company) on Titan’s financial condition, results of operations, liquidity and other factors which may affect the Company’s future results.  The MD&A in this quarterly report should be read in conjunction with the MD&A in Titan’s 2010 annual report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements, including statements regarding, among other items:

·   Anticipated trends in the Company’s business

·   Future expenditures for capital projects

·   The Company’s ability to continue to control costs and maintain quality

·   Ability to meet financial covenants and conditions of loan agreements

·   The Company’s business strategies, including its intention to introduce new products

·   Expectations concerning the performance and success of the Company’s existing and new products

·   The Company’s intention to consider and pursue acquisition and divestiture opportunities

Readers of this Form 10-Q should understand that these forward-looking statements are based on the Company’s expectations and are subject to a number of risks and uncertainties (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the Company’s most recent annual report on Form 10-K), certain of which are beyond the Company’s control.

Actual results could differ materially from these forward-looking statements as a result of certain factors, including:

·   The effect of a recession on the Company and its customers and suppliers

·   Changes in the Company’s end-user markets as a result of world economic or regulatory influences

·   Changes in the marketplace, including new products and pricing changes by the Company’s competitors

·   Ability to maintain satisfactory labor relations

·   Unfavorable outcomes of legal proceedings

·   Availability and price of raw materials

·   Levels of operating efficiencies

·   Unfavorable product liability and warranty claims

·   Actions of domestic and foreign governments

·   Results of investments

·   Fluctuations in currency translations

·   Laws and regulations related to climate change

·   Risks associated with environmental laws and regulations

Any changes in such factors could lead to significantly different results.  The Company cannot provide any assurance that the assumptions referred to in the forward-looking statements or otherwise are accurate or will prove to transpire.  Any assumptions that are inaccurate or do not prove to be correct could have a material adverse effect on the Company’s ability to achieve the results as indicated in forward-looking statements.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this document will in fact transpire.

26

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

OVERVIEW

Titan International, Inc. and its subsidiaries are leading manufacturers of wheels, tires and assemblies for off-highway vehicles used in the agricultural, earthmoving/construction and consumer markets.  Titan manufactures both wheels and tires for the majority of these market applications, allowing the Company to provide the value-added service of delivering complete wheel and tire assemblies.  The Company offers a broad range of products that are manufactured in relatively short production runs to meet the specifications of original equipment manufacturers (OEMs) and/or the requirements of aftermarket customers.

Agricultural Market:  Titan’s agricultural rims, wheels and tires are manufactured for use on various agricultural and forestry equipment, including tractors, combines, skidders, plows, planters and irrigation equipment, and are sold directly to OEMs and to the aftermarket through independent distributors, equipment dealers and Titan’s own distribution centers.

Earthmoving/Construction Market:  The Company manufactures rims, wheels and tires for various types of off-the-road (OTR) earthmoving, mining, military and construction equipment, including skid steers, aerial lifts, cranes, graders and levelers, scrapers, self-propelled shovel loaders, articulated dump trucks, load transporters, haul trucks and backhoe loaders.

Consumer Market:  Titan builds select products for all-terrain vehicles (ATV), turf, golf and trailer applications.  The Company provides wheels/tires and assembles brakes, actuators and components for the domestic boat, recreational and utility trailer markets. The consumer market also includes sales of products sold to Goodyear and other customers under supply agreements.

The Company’s major OEM customers include large manufacturers of off-highway equipment such as AGCO Corporation, CNH Global N.V., Deere & Company and Kubota Corporation, in addition to many other off-highway equipment manufacturers.  The Company distributes products to OEMs, independent and OEM-affiliated dealers, and through a network of distribution facilities.

The table provides highlights for the quarter ended September 30, 2011, compared to 2010 (amounts in thousands):

	Three months ended September 30,
	2011		2010		% Increase
Net sales	$	398,805	$	222,818		79	%
Gross profit		52,994		27,946		90	%
Income from operations		41,387		12,522		231	%
Net income		21,525		4,015		436	%

Quarter:  The Company recorded sales of $398.8 million for the third quarter of 2011, which were 79% higher than the third quarter 2010 sales of $222.8 million.  The higher quarterly sales were primarily the result of the April acquisition of the Goodyear Latin American farm tire business including the Sao Paulo, Brazil manufacturing facility which recorded sales of $93.6 million for the third quarter of 2011.  Also contributing were increased demand and pricing/mix improvements which resulted largely from increased raw material prices that were passed on to customers.

The Company’s gross profit was $53.0 million, or 13.3% of net sales, for the third quarter of 2011, compared to $27.9 million, or 12.5% of net sales, in 2010.  Income from operations was $41.4 million for the third quarter of 2011, compared to $12.5 million in 2010.  The increase in the Company’s gross profit and income from operations was primarily related to increased sales levels which were driven by the acquisition of the Goodyear Latin American farm tire business as well as gains from improved plant utilization resulting from the higher sales levels.  The Sao Paulo, Brazil manufacturing facility provided gross profit of $8.3 million for the third quarter of 2011.  Net income was $21.5 million for the quarter, compared to $4.0 million in 2010.  The net income for the third quarter of 2011 benefitted from a decrease of approximately $11 million in CEO special performance award expenses.  Basic earnings per share were $.50 for the third quarter of 2011, compared to $.12 in 2010.  

27

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

The table provides highlights for the nine months ended September 30, 2011, compared to 2010 (amounts in thousands):

	Nine months ended September 30,
	2011		2010		% Increase
Net sales	$	1,084,081	$	648,922		67	%
Gross profit		173,600		87,936		97	%
Income from operations		112,663		40,080		181	%
Net income		44,045		10,662		313	%

Year-to-date:  The Company recorded sales of $1.1 billion for the nine months ended September 30, 2011, as compared to $648.9 million in 2010.  The higher year-to-date sales were primarily the result of increased demand and pricing/mix improvements which resulted largely from increased raw material prices that were passed on to customers.  In addition, sales increased as the result of the April acquisition of the Goodyear Latin American farm tire business including the Sao Paulo, Brazil manufacturing facility which recorded sales of $185.9 million for the nine months ended September 30, 2011.

The Company’s gross profit was $173.6 million, or 16.0% of net sales, for the nine months ended September 30, 2011, compared to $87.9 million, or 13.6% of net sales, in 2010.  Income from operations was $112.7 million for the nine months ended September 30, 2011, compared to $40.1 million in 2010.  The increase in the Company’s gross profit and income from operations was primarily related to increased sales levels as well as gains from improved plant utilization resulting from the higher sales levels.  The Sao Paulo, Brazil manufacturing facility provided gross profit of $17.0 million for the nine months ended September 30, 2011.  Net income was $44.0 million for the nine months ended September 30, 2011, compared to $10.7 million in 2010.  Basic earnings per share were $1.05 for the nine months ended September 30, 2011, compared to $.31 in 2010.  Net income and earnings per share for 2011 were negatively affected by the noncash convertible debt conversion charge of $16.1 million.

PURCHASE OF GOODYEAR’S LATIN AMERICAN FARM TIRE BUSINESS

On April 1, 2011, Titan closed on the acquisition of The Goodyear Tire & Rubber Company’s Latin American farm tire business for approximately $98.6 million U.S. dollars, subject to post-closing conditions and adjustments.  The transaction includes Goodyear’s Sao Paulo, Brazil manufacturing plant, property, equipment; inventories; a licensing agreement that allows Titan to sell Goodyear-brand farm tires in Latin America for seven years; and extends the North American licensing agreement for seven years.

COLLECTIVE BARGAINING AGREEMENTS

The labor agreements for the Company’s Bryan, Ohio and Freeport, Illinois, facilities expired on November 19, 2010, for the employees covered by their respective collective bargaining agreements, which account for approximately 31% of Titan employees in the United States.  As of September 30, 2011, the employees of these two facilities were working without a contract under the terms of the Company’s latest offer.  The respective unions have retained their rights to challenge the Company’s actions.

28

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

CRITICAL ACCOUNTING ESTIMATES

Preparation of the financial statements and related disclosures in compliance with accounting principles generally accepted in the United States of America requires the application of appropriate technical accounting rules and guidance, as well as the use of estimates.  The Company’s application of these policies involves assumptions that require difficult subjective judgments regarding many factors, which, in and of themselves, could materially impact the financial statements and disclosures.  A future change in the estimates, assumptions or judgments applied in determining the following matters, among others, could have a material impact on future financial statements and disclosures.

Asset and Business Acquisitions

The allocation of purchase price for asset and business acquisitions requires management estimates and judgment as to expectations for future cash flows of the acquired assets and business and the allocation of those cash flows to identifiable intangible assets in determining the estimated fair value for purchase price allocations.  If the actual results differ from the estimates and judgments used in determining the purchase price allocations, impairment losses could occur.  To aid in establishing the value of any intangible assets at the time of acquisition, the Company typically engages a professional appraisal firm.

Inventories

Inventories are valued at lower of cost or market.  At September 30, 2011, approximately 32% of the Company’s inventories were valued under the last-in, first-out (LIFO) method.  The major steel material inventory and related work-in-process and their finished goods are accounted for under the LIFO method.  The remaining inventories were valued under the first-in, first-out (FIFO) method or average cost method.  Market value is estimated based on current selling prices.  Estimated provisions are established for slow-moving and obsolete inventory.

Income Taxes

Deferred income tax provisions are determined using the liability method whereby deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and income tax basis of assets and liabilities.  The Company assesses the realizability of its deferred tax asset positions and recognizes and measures uncertain tax positions in accordance with ASC 740 Income Taxes.

Retirement Benefit Obligations

Pension benefit obligations are based on various assumptions used by third-party actuaries in calculating these amounts.  These assumptions include discount rates, expected return on plan assets, mortality rates and other factors.  Revisions in assumptions and actual results that differ from the assumptions affect future expenses, cash funding requirements and obligations.  The Company has three frozen defined benefit pension plans and one defined benefit plan that previously purchased a final annuity settlement.  During the first nine months of 2011, the Company contributed cash funds of $2.2 million to its frozen pension plans.  Titan expects to contribute approximately $0.6 million to these frozen defined benefit pension plans during the remainder of 2011.  For more information concerning these costs and obligations, see the discussion of the “Pensions” and Note 20 to the Company’s financial statements on Form 10-K for the fiscal year ended December 31, 2010.

CONVERTIBLE SENIOR SUBORDINATED NOTES CONVERSION

In the first quarter of 2011, the Company closed an Exchange Agreement with a note holder of the convertible notes, pursuant to which such holder exchanged approximately $59.6 million in aggregate principal amount of the convertible notes for approximately 6.6 million shares of the Company’s common stock, plus a payment for the accrued and unpaid interest.  In connection with the exchange, the Company recognized a noncash charge of $16.1 million in accordance with ASC 470-20 Debt – Debt with Conversion and Other Options.

29

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

DISCHARGE OF SENIOR UNSECURED NOTES

In the first quarter of 2011, Titan satisfied and discharged the indenture relating to the 8% senior unsecured notes due January 2012 by depositing with the trustee $1.1 million cash representing the outstanding principal of such notes and interest payments due on July 15, 2011, and at maturity on January 15, 2012.  Titan irrevocably instructed the trustee to apply the deposited money toward the interest and principal of the notes.

RESULTS OF OPERATIONS

Highlights for the three and nine months ended September 30, 2011, compared to 2010 (amounts in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Net sales	$	398,805		$	222,818		$	1,084,081		$	648,922
Cost of sales		345,811			194,872			910,481			560,986
Gross profit		52,994			27,946			173,600			87,936
Gross profit margin		13.3	%		12.5	%		16.0	%		13.6	%

Net Sales

Quarter:  Net sales for the quarter ended September 30, 2011, were $398.8 million, compared to $222.8 million in 2010.  The higher quarterly sales were primarily the result of the April acquisition of the Goodyear Latin American farm tire business including the Sao Paulo, Brazil manufacturing facility which recorded sales of $93.6 million for the third quarter of 2011.  Also contributing were increased demand and pricing/mix improvements which resulted largely from increased raw material prices that were passed on to customers.

Year-to-date:  Net sales for the nine months ended September 30, 2011, were $1.1 billion, compared to 2010 net sales of $648.9 million.  The Sao Paulo, Brazil manufacturing facility recorded total sales of $185.9 million for the nine months ended September 30, 2011.  Also contributing were increased demand and pricing/mix improvements which resulted largely from increased raw material prices that were passed on to customers.

Cost of Sales and Gross Profit

Quarter:  Cost of sales was $345.8 million for the third quarter of 2011, compared to $194.9 million for 2010.  The higher cost of sales resulted primarily from the increase in the quarterly sales levels.  The cost of sales increased by approximately 77%, which is comparable to an approximate 79% increase in net sales.

Gross profit for the third quarter of 2011 was $53.0 million, or 13.3% of net sales, compared to $27.9 million, or 12.5% of net sales, for the third quarter of 2010.  The Sao Paulo, Brazil manufacturing facility provided gross profit of $8.3 million for the third quarter of 2011.  The remaining increase in the Company’s gross profit was primarily related to increased sales levels as well as gains from improved plant utilization resulting from the higher sales levels.

Year-to-date:  Cost of sales was $910.5 million for the nine months ended September 30, 2011, compared to $561.0 million in 2010.  The higher cost of sales resulted from the significant increase in the sales levels and increased raw material prices.  The cost of sales increased by approximately 62%, compared to an approximate 67% increase in net sales.

Gross profit for the nine months ended September 30, 2011, was $173.6 million or 16.0% of net sales, compared to $87.9 million or 13.6% of net sales in 2010.  The Sao Paulo, Brazil manufacturing facility provided gross profit of $17.0 million for the nine months ended September 30, 2011.  The remaining increase in the Company’s gross profit was primarily related to increased sales levels as well as gains from improved plant utilization resulting from the higher sales levels.

30

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Selling, General and Administrative Expenses

Selling, general and administrative expenses were as follows (amounts in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Selling, general and administrative	$	8,548		$	12,037		$	50,414		$	36,008
Percentage of net sales		2.1	%		5.4	%		4.7	%		5.5	%

Quarter:  Selling, general and administrative (SG&A) expenses for the third quarter of 2011 were $8.5 million or 2.1% of net sales, compared to $12.0 million or 5.4% of net sales for 2010.  The lower SG&A expenses were the result of a decrease of approximately $11 million in CEO special performance award expenses offset by an increase of selling and marketing expenses of approximately $2 million, primarily due to increased sales levels, and approximately $3 million of expenses at recently acquired facilities.  As a percentage of sales, SG&A decreased as a result of the decreased CEO special performance award expenses and the absence of selling and marketing expenses related to supply agreement sales.

Year-to-date:  Expenses for SG&A for the nine months ended September 30, 2011, were $50.4 million or 4.7% of net sales, compared to $36.0 million or 5.5% of net sales in 2010.  The higher SG&A expenses were primarily the result of higher selling and marketing expenses related to the increased sales levels offset by a decrease in the accrual for the CEO special performance award due to a decline in the Company’s stock price.  Selling and marketing expenses were approximately $6 million higher, primarily due to increased sales levels.  Approximately $5 million of SG&A expenses of recently acquired facilities also contributed to the increase.  CEO special performance award expenses were approximately $5 million lower.

Research and Development Expenses

Research and development expenses were as follows (amounts in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Research and development expenses	$	796		$	1,112		$	2,993		$	5,039
Percentage of net sales		0.2	%		0.5	%		0.3	%		0.8	%

Quarter:  Research and development (R&D) expenses for the third quarter of 2011 were $0.8 million or 0.2% of net sales, compared to $1.1 million or 0.5% of net sales for 2010.  The lower R&D costs recorded during the third quarter of approximately $0.3 million primarily resulted from less R&D related to the giant off-the-road (OTR) products.

Year-to-date:  Expenses for R&D were $3.0 million or 0.3% of net sales for the nine months ended September 30, 2011, compared to $5.0 million or 0.8% of net sales for 2010.  The lower R&D costs recorded of approximately $2.0 million primarily resulted from less R&D related to the giant off-the-road (OTR) products.

Royalty Expense

Royalty expense was as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Royalty expense	$	2,263	$	2,275	$	7,530	$	6,809

The Company has a trademark license agreement with The Goodyear Tire & Rubber Company to manufacture and sell certain off-highway tires in North America and Latin America under the Goodyear name.  The North American and Latin American royalties were prepaid for seven years as a part of the Goodyear Latin American farm tire acquisition.

31

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Quarter:  Royalty expenses recorded were $2.3 million for each of the quarters ended September 30, 2011 and 2010, respectively.

Year-to-date:Year-to-date royalty expenses recorded were $7.5 million and $6.8 million for the nine months ended September 30, 2011 and 2010, respectively.  As sales subject to the license agreement increased in the first nine months of 2011, the Company’s royalty expense increased accordingly.

Income from Operations

Income from operations was as follows (amounts in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Income from operations	$	41,387		$	12,522		$	112,663		$	40,080
Percentage of net sales		10.4	%		5.6	%		10.4	%		6.2	%

Quarter:Income from operations for the third quarter of 2011 was $41.4 million or 10.4% of net sales, compared to $12.5 million or 5.6% of net sales in 2010.

Year-to-date:  Income from operations for the nine months ended September 30, 2011, was $112.7 million or 10.4% of net sales, compared to $40.1 million or 6.2% of net sales in 2010.

Interest Expense

Interest expense was as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Interest expense	$	6,616	$	5,867	$	19,045	$	19,713

Quarter:Interest expense was $6.6 million and $5.9 million for the quarter ended September 30, 2011 and 2010, respectively.  The Company’s interest expense for the third quarter of 2011 increased from the previous year primarily as a result of the interest recorded for the 7.875% senior secured notes issued in the fourth quarter of 2010, offset by the repurchase of 8% senior unsecured notes in 2010 and the exchange agreement for 5.625% convertible senior subordinated notes in the first quarter of 2011.  Interest expense from Titan Brazil also contributed to the increased interest expense for the third quarter.

Year-to-date:Year-to-date interest expense was $19.0 million and $19.7 million for the nine months ended September 30, 2011 and 2010, respectively.  The Company’s interest expense for the first nine months of 2011 decreased from the previous year primarily as a result of the repurchase of 8% senior unsecured notes in 2010 and the exchange agreement for 5.625% convertible senior subordinated notes in the first quarter of 2011, offset by the interest recorded for the 7.875% senior secured notes issued in the fourth quarter of 2010.  Interest expense from Titan Brazil also contributed to the increased year-to-date interest expense.

Noncash Convertible Debt Conversion Charge

Noncash convertible debt conversion charge was as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Noncash convertible debt conversion charge	$	0	$	0	$	16,135	$	0

In the first quarter of 2011, the Company closed an exchange agreement converting approximately $59.6 million of the 5.625% convertible notes into approximately 6.6 million shares of the Company’s common stock.  In connection with the exchange, the Company recognized a noncash charge of $16.1 million in accordance with ASC 470-20 Debt – Debt with Conversion and Other Options.

32

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Loss on Senior Note Repurchase

Loss on senior note repurchase was as follows (amounts in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2011		2010			2011		2010
Loss on senior note repurchase	$	0	$	(473	)	$	0	$	(3,195	)

Quarter:  In July 2010, the Company closed on a transaction to repurchase $6.5 million of its outstanding senior unsecured 8% notes due January 2012.  Titan recorded a loss on senior note repurchase of $(0.5) million in the third quarter of 2010.

Year-to-date:  In May 2010, the Company commenced a tender offer to purchase its issued and outstanding senior unsecured 8% notes due January 2012.  For the nine months ended September 2010, in connection with the $47.4 million tender offer and the repurchase of $6.5 million of these notes in July 2010, the Company recorded a loss on senior note repurchase of $(3.2) million.

Other Income (Expense)

Other income (expense) was as follows (amounts in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2011			2010		2011		2010
Other income (expense)	$	(556	)	$	401	$	1,907	$	307

Quarter:  Other expense was $(0.6) million for the quarter ended September 30, 2011, as compared to other income of $0.4 million for the quarter ended September 30, 2010.  The Company recorded a $(1.3) million loss on contractual obligation investments, offset by $1.0 million in discount amortization on prepaid royalty in the quarter ended September 30, 2011.  The Company recorded a $0.6 million gain on contractual obligation investments in the quarter ended September 30, 2010.

Year-to-date:  Year-to-date other income was $1.9 million for 2011 as compared to $0.3 million in 2010.  For the nine months ended September 30, 2011, the Company recorded $2.1 million in discount amortization on prepaid royalty and a $0.9 million gain on acquisition, offset by a loss on contractual obligation investments of $(1.1) million.  The Company recorded a $0.3 million gain on contractual obligation investments in the nine months ended September 30, 2010.

Income Taxes

Income taxes were as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Income tax expense	$	12,690	$	2,568	$	35,345	$	6,817

Quarter:  The Company recorded income tax expense of $12.7 million for the quarter ended September 30, 2011, as compared to $2.6 million in 2010.   The Company’s effective income tax rate was 37% and 39% for the three months ended September 30, 2011 and 2010, respectively.

Year-to-date:  Income tax expense for the nine months ended September 30, 2011 and 2010, was $35.3 million and $6.8 million, respectively.  The Company’s effective income tax rate was 45% and 39% for the nine months ended September 30, 2011 and 2010, respectively.  The Company’s 2011 income tax expense and rate differs from the amount of income tax determined by applying the U.S Federal income tax rate to pre-tax income primarily as a result of the $16.1 million noncash charge taken in connection with the exchange agreement on the Company’s convertible debt.  This noncash charge is not fully deductible for income tax purposes.

33

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Net Income

Net income was as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net income	$	21,525	$	4,015	$	44,045	$	10,662

Quarter:  Net income for the quarter ended September 30, 2011, was $21.5 million, compared to $4.0 million in 2010.  The Goodyear Latin American acquisition provided net income of $3.3 million for the third quarter of 2011.  For the quarter ended September 30, 2011 and 2010, basic earnings per share were $.50 and $.12, respectively, and diluted earnings per share were $.42 and $.11, respectively.

Year-to-date:  Net income for the nine months ended September 30, 2011 and 2010, was $44.0 million and $10.7 million, respectively.  The Goodyear Latin American acquisition provided net income of $7.7 million for the nine months ended September 30, 2011.  For the nine months ended September 30, 2011 and 2010, basic earnings per share were $1.05 and $.31, respectively, and diluted earnings per share were $.89 and $.30, respectively.

Agricultural Segment Results

Agricultural segment results were as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net sales	$	246,456	$	170,675	$	713,721	$	497,503
Gross profit		39,008		25,283		133,874		78,201
Income from operations		34,580		21,440		120,248		66,222

Quarter:  Net sales in the agricultural market were $246.5 million for the quarter ended September 30, 2011, as compared to $170.7 million in 2010.  The increase in net sales was the result of increasing demand and pricing/mix improvements which were primarily the result of increased raw material prices that were passed to customers, and manufacturing capacity resulting from the acquisition of the Goodyear Latin American farm tire business including the Sao Paulo, Brazil manufacturing facility.  Agricultural market sales from this facility were $32.4 million for quarter ended September 30, 2011.

Gross profit in the agricultural market was $39.0 million for the quarter ended September 30, 2011, as compared to $25.3 million in 2010.  The Company’s gross profit benefitted from improved plant utilization resulting from the higher sales levels.  Income from operations in the agricultural market was $34.6 million for the quarter ended September 30, 2011, as compared to $21.4 million in 2010.

Year-to-date:  Net sales in the agricultural market were $713.7 million for the nine months ended September 30, 2011, as compared to $497.5 million in 2010.  The increase in net sales was the result of increasing demand and pricing/mix improvements which were primarily the result of increased raw material prices that were passed to customers, and manufacturing capacity resulting from the acquisition of the Goodyear Latin American farm tire business including the Sao Paulo, Brazil manufacturing facility.  Agricultural market sales from this facility were $61.4 million for the nine months ended September 30, 2011.

Gross profit in the agricultural market was $133.9 million for the nine months ended September 30, 2011, as compared to $78.2 million in 2010.  The Company’s gross profit benefitted from improved plant utilization resulting from the higher sales levels.  Income from operations in the agricultural market was $120.2 million for the nine months ended September 30, 2011, as compared to $66.2 million in 2010.

34

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Earthmoving/Construction Segment Results

Earthmoving/Construction segment results were as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net sales	$	81,078	$	47,848	$	224,484	$	139,161
Gross profit		8,814		2,495		28,227		10,294
Income from operations		7,418		1,077		23,408		4,080

Quarter:  The Company’s earthmoving/construction market net sales were $81.1 million for the quarter ended September 30, 2011, as compared to $47.8 million in 2010.  The increase in net sales was the result of increasing demand and pricing/mix improvements which were primarily the result of increased raw material prices that were passed to customers and price increases resulting from additional demand.  The Company continues to see increasing demand in the earthmoving/construction segment.

Gross profit in the earthmoving/construction market was $8.8 million for the quarter ended September 30, 2011, as compared to $2.5 million in 2010.  The Company’s gross profit benefitted from improved plant utilization resulting from the higher sales levels.  Income from operations in the earthmoving/construction market was $7.4 million for the quarter ended September 30, 2011, as compared to $1.1 million in 2010.

Year-to-date:  The Company’s earthmoving/construction market net sales were $224.5 million for the nine months ended September 30, 2011, as compared to $139.2 million in 2010.  The increase in net sales was the result of increasing demand and pricing/mix improvements which were primarily the result of increased raw material prices that were passed to customers and price increases resulting from additional demand.  The Company continues to see increasing demand in the earthmoving/construction segment.

Gross profit in the earthmoving/construction market was $28.2 million for the nine months ended September 30, 2011, as compared to $10.3 million in 2010. The Company’s gross profit benefitted from improved plant utilization resulting from the higher sales levels.  Income from operations in the earthmoving/construction market was $23.4 million for the nine months ended September 30, 2011, as compared to $4.1 million in 2010.

Consumer Segment Results

Consumer segment results were as follows (amounts in thousands):

	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net sales	$	71,271	$	4,295	$	145,876	$	12,258
Gross profit		5,812		827		13,567		2,302
Income from operations		3,615		734		9,352		2,030

Quarter:  Consumer market net sales were $71.3 million for the quarter ended September 30, 2011, as compared to $4.3 million in 2010.  The increase in net sales was primarily the result of the Goodyear Latin American farm tire acquisition agreement, which included supply agreements for certain product sales, which are included in the consumer segment.  Sales under these agreements were $61.2 million for the quarter ended September 30, 2011.

The Company recorded a supply agreement liability as a part of the fair value adjustments for the Goodyear Latin American farm tire acquisition, as the agreements are for sales at below market prices.  The liability will be amortized with an offset to cost of sales over the three year life of the agreement.  For the quarter ended September 30, 2011, the decrease in cost of sales for this liability totaled $4.5 million.

Gross profit from the consumer market was $5.8 million for the quarter ended September 30, 2011, as compared to $0.8 million in 2010.  The Company’s increase in gross profit primarily resulted from the supply agreements.  Consumer market income from operations was $3.6 million for the quarter ended September 30, 2011, as compared to $0.7 million for 2010.

35

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Year-to-date:  Consumer market net sales were $145.9 million for the nine months ended September 30, 2011, as compared to $12.3 million in 2010.  The increase in net sales was primarily the result of the Goodyear Latin American farm tire acquisition agreement, which included supply agreements for certain product sales, which are included in the consumer segment.  Sales under these agreements were $124.5 million for the nine months ended September 30, 2011.

The Company recorded a supply agreement liability as a part of the fair value adjustments for the Goodyear Latin American farm tire acquisition, as the agreements are for sales at below market prices.  The liability will be amortized with an offset to cost of sales over the three year life of the agreement.  For the nine months ended September 30, 2011, the decrease in cost of sales for this liability totaled $9.1 million.

Gross profit from the consumer market was $13.6 million for the nine months ended September 30, 2011, as compared to $2.3 million in 2010.  The Company’s increase in gross profit primarily resulted from the supply agreements.  Consumer market income from operations was $9.4 million for the nine months ended September 30, 2011, as compared to $2.0 million for 2010.

Segment Summary (Amounts in thousands)

Quarter

Three months ended September 30, 2011	Agricultural		Earthmoving/ Construction		Consumer		Corporate Expenses			Consolidated Totals
Net sales	$	246,456	$	81,078	$	71,271	$	0		$	398,805
Gross profit (loss)		39,008		8,814		5,812		(640	)		52,994
Income (loss) from operations		34,580		7,418		3,615		(4,226	)		41,387
Three months ended September 30, 2010
Net sales	$	170,675	$	47,848	$	4,295	$	0		$	222,818
Gross profit (loss)		25,283		2,495		827		(659	)		27,946
Income (loss) from operations		21,440		1,077		734		(10,729	)		12,522

Year-to-Date

Nine months ended September 30, 2011	Agricultural		Earthmoving/ Construction		Consumer		Corporate Expenses			Consolidated Totals
Net sales	$	713,721	$	224,484	$	145,876	$	0		$	1,084,081
Gross profit (loss)		133,874		28,227		13,567		(2,068	)		173,600
Income (loss) from operations		120,248		23,408		9,352		(40,345	)		112,663
Nine months ended September 30, 2010
Net sales	$	497,503	$	139,161	$	12,258	$	0		$	648,922
Gross profit (loss)		78,201		10,294		2,302		(2,861	)		87,936
Income (loss) from operations		66,222		4,080		2,030		(32,252	)		40,080

36

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Corporate Expenses

Quarter

Income from operations on a segment basis does not include corporate expenses or depreciation and amortization expense related to property, plant and equipment carried at the corporate level totaling $4.2 million for the quarter ended September 30, 2011, as compared to $10.7 million for 2010.

Corporate expenses for the quarter ended September 30, 2011, were composed of selling and marketing expenses of approximately $7 million and administrative expenses of approximately $8 million.  The administrative expenses for the quarter ended September 30, 2011, were offset by a decrease of approximately $11 million in the CEO special performance award due to a decline in the Company’s stock price.  With this decrease, net administrative expenses recorded were approximately $(3) million.

Corporate expenses for the quarter ended September 30, 2010, were composed of selling and marketing expenses of approximately $5 million and administrative expenses of approximately $6 million.

Corporate selling and marketing expenses were approximately $2 million higher in the third quarter of 2011 as the result of higher sales levels.

Year-to-Date

Income from operations on a segment basis does not include corporate expenses or depreciation and amortization expense related to property, plant and equipment carried at the corporate level totaling $40.3 million for the nine months ended September 30, 2011, as compared to $32.3 million for 2010.

Corporate expenses for the nine months ended September 30, 2011, were composed of selling and marketing expenses of approximately $20 million and administrative expenses of approximately $20 million.

Corporate expenses for the nine months ended September 30, 2010, were composed of selling and marketing expenses of approximately $14 million and administrative expenses of approximately $18 million.

Corporate selling and marketing expenses were approximately $7 million higher for the nine months ended September 30, 2011 as the result of higher sales levels.  Corporate administrative expenses were approximately $2 million higher for the nine months ended September 30, 2011, primarily as the result of increased business activity in line with the Company’s growth.

MARKET RISK SENSITIVE INSTRUMENTS

The Company’s risks related to foreign currencies, commodity prices and interest rates are consistent with those for 2010.  For more information, see the “Market Risk Sensitive Instruments” discussion in the Company’s Form 10-K for the fiscal year ended December 31, 2010.

PENSIONS

The Company has three frozen defined benefit pension plans and one defined benefit plan that previously purchased a final annuity settlement.  These plans are described in Note 20 of the Company’s Notes to Consolidated Financial Statements in the 2010 Annual Report on Form 10-K.

The Company’s recorded liability for pensions is based on a number of assumptions, including discount rates, rates of return on investments, mortality rates and other factors.  Certain of these assumptions are determined by the Company with the assistance of outside actuaries.  Assumptions are based on past experience and anticipated future trends.  These assumptions are reviewed on a regular basis and revised when appropriate.  Revisions in assumptions and actual results that differ from the assumptions affect future expenses, cash funding requirements and the carrying value of the related obligations.  Titan expects to contribute approximately $0.6 million to these frozen defined pension plans during the remainder of 2011.

37

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

As of September 30, 2011, the Company had $94.3 million of cash balances within various bank accounts.  This cash balance decreased by $145.2 million from December 31, 2010, due to the following cash flow items.

(amounts in thousands)
	September 30, 2011		December 31, 2010
Cash	$	94,274	$	239,500

Operating cash flows

Summary of cash flows from operating activities:

(amounts in thousands)	Nine months ended September 30,
	2011			2010			Change
Net income	$	44,045		$	10,662		$	33,383
Depreciation and amortization		32,753			27,617			5,136
Noncash convertible debt conversion charge		16,135			0			16,135
Deferred income tax provision		8,038			8,043			(5	)
Accounts receivable		(132,294	)		(46,627	)		(85,667	)
Inventories		(47,366	)		(25,840	)		(21,526	)
Accounts payable		69,540			22,889			46,651
Other operating activities		(2,534	)		10,904			(13,438	)
Cash provided by (used for) operating activities	$	(11,683	)	$	7,648		$	(19,331	)

In the first nine months of 2011, operating activities used cash of $11.7 million.  This cash was primarily used by increases in accounts receivable and inventory of $132.3 million and $47.4 million, respectively, offset by higher accounts payable of $69.5 million.  Net income of $44.0 million included $32.8 million of noncash charges for depreciation and amortization, as well as a noncash convertible debt conversion charge of $16.1 million.   Deferred tax assets were reduced by $8.0 million as the Company used current income to reduce the deferred tax asset for previously recorded net operating losses.

In the first nine months of 2010, operating activities provided cash of $7.6 million which included net income of $10.7 million and an increase in accounts payable of $22.9 million.  Net income included $27.6 million of noncash charges for depreciation and amortization.  Positive cash inflows were offset by increases in accounts receivable and inventory of $46.6 million and $25.8 million, respectively.  Deferred tax assets were reduced by $8.0 million as the Company used current income to reduce the deferred tax asset for previously recorded net operating losses.

Operating cash flows decreased $19.3 million when comparing the nine months ended September 30, 2011, to the nine months ended September 30, 2010.  Net income in the first nine months of 2011 was $33.4 million higher than the net income in the first nine months of 2010.  When comparing the first nine months of 2011 to the first nine months of 2010, cash used for accounts receivable increased $85.7 million.  The significant increase in accounts receivable is primarily due to increased sales levels.  Also, the Goodyear Latin American farm tire business acquisition did not include accounts receivable.  The accounts receivable increase was partly offset by increases in accounts payable of $46.7 million and a noncash convertible debt conversion charge of $16.1 million.

38

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Investing cash flows

Summary of cash flows from investing activities:

(amounts in thousands)	Nine months ended September 30,
	2011			2010			Change
Acquisitions	$	(99,118	)	$	0		$	(99,118	)
Purchases of marketable securities		(30,000	)		0			(30,000	)
Capital expenditures		(17,901	)		(20,056	)		2,155
Other investing activities		1,941			91			1,850
Cash used for investing activities	$	(145,078	)	$	(19,965	)	$	(125,113	)

Net cash used for investing activities was $145.1 million in the first nine months of 2011, as compared to $20.0 million in the first nine months of 2010.  The Company invested a total of $99.1 in acquisitions, and $30.0 million in marketable securities in the first nine months of 2011.  Other investing activities relate primarily to fixed asset disposals.

Financing cash flows

Summary of cash flows from financing activities:

(amounts in thousands)	Nine months ended September 30,
	2011			2010			Change
Repurchase of senior notes	$	(1,064	)	$	(56,674	)	$	55,610
Term loan borrowing		14,148			0			14,148
Proceeds from exercise of stock options		477			240			237
Payment of financing fees		0			(586	)		586
Payment on debt		(629	)		0			(629	)
Dividends paid		(598	)		(530	)		(68	)
Cash provided by (used for) financing activities	$	12,334		$	(57,550	)	$	69,884

In the first nine months of 2011, cash of $12.3 million was provided by financing activities.  This cash was primarily provided by term loan borrowings of $14.1 million used to provide working capital to Titan’s Latin American operations.

In the first nine months of 2010, cash of $57.6 million was used for financing activities.  This cash was primarily used for repurchase of senior notes of $56.7 million.

Financing cash flows increased $69.9 million when comparing the first nine months of 2011 to the first nine months of 2010.  This cash flow increase resulted primarily from term loan borrowings in 2011 offset by repurchase of senior notes in 2010.

Other Issues

The Company’s business is subject to seasonal variations in sales that affect inventory levels and accounts receivable balances.  Historically, Titan tends to experience higher sales demand in the first and second quarters.  However, in 2011, Titan’s third quarter sales continued at a high level due to increased demand in all of the Company’s segments; agricultural, earthmoving/construction and consumer.

Debt Covenants

The Company’s revolving credit facility (credit facility) contains various covenants and restrictions.  The financial covenants in this agreement require that:

·   Collateral coverage be equal to or greater than 1.2 times the outstanding revolver balance.

·   If the 30-day average of the outstanding revolver balance exceeds $70 million, the fixed charge coverage ratio be equal to or greater than a 1.1 to 1.0 ratio.

39

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

Restrictions include:

·   Limits on payments of dividends and repurchases of the Company’s stock.

·   Restrictions on the ability of the Company to make additional borrowings, or to consolidate, merge or otherwise fundamentally change the ownership of the Company.

·   Limitations on investments, dispositions of assets and guarantees of indebtedness.

·   Other customary affirmative and negative covenants.

These covenants and restrictions could limit the Company’s ability to respond to market conditions, to provide for unanticipated capital investments, to raise additional debt or equity capital, to pay dividends or to take advantage of business opportunities, including future acquisitions.  The failure by Titan to meet these covenants could result in the Company ultimately being in default on these loan agreements.

The Company is in compliance with these covenants and restrictions as of September 30, 2011.  The collateral coverage ratio was not applicable as there were no outstanding borrowings under the revolving credit facility at September 30, 2011.  The fixed charge coverage ratio did not apply for the quarter ended September 30, 2011.

Liquidity Outlook

At September 30, 2011, the Company had $94.3 million of cash and cash equivalents and $88.0 million of unused availability under the terms of its credit facility.  The availability under the Company’s $100 million credit facility was reduced by $12.0 million for letters of credit used to provide working capital to our Sao Paulo, Brazil manufacturing facility.  Titan’s acquisition of Goodyear’s Latin American farm tire business did not include accounts receivable.  As a result, during the second quarter Titan obtained $14.3 million in loans to provide working capital for operations at the Sao Paulo, Brazil manufacturing facility.  During the remainder of 2011, Titan does not anticipate significant levels of financing will be required for working capital to fund operations at the Sao Paulo, Brazil manufacturing facility.

Capital expenditures for the remainder of 2011 are forecasted to be approximately $4 million to $5 million.  Cash payments for interest are currently forecasted to be approximately $1 million for the remainder of 2011 based on September 30, 2011, debt balances.

In the future, Titan may seek to grow by making acquisitions which will depend on the ability to identify suitable acquisition candidates, to negotiate acceptable terms for their acquisition and to finance those acquisitions.

Subject to the terms of indebtedness, the Company may finance future acquisitions with cash on hand, cash from operations, additional indebtedness and/or by issuing additional equity securities.

Cash on hand, anticipated internal cash flows from operations and utilization of remaining available borrowings are expected to provide sufficient liquidity for working capital needs, capital expenditures and potential acquisitions.  If the Company were to exhaust all currently available working capital sources or not meet the financial covenants and conditions of its loan agreements, the Company’s ability to secure additional funding would be negatively impacted.

40

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

NEW ACCOUNTING STANDARDS

Business Combinations

In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-29, “Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations.”  This update addresses diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations.  The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  The amendments in this update were effective prospectively for business combinations for which the acquisition date was on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.  The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows.

Fair Value Measurement

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  This update establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS).  The amendments in this update are effective during interim and annual periods beginning after December 15, 2011.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Comprehensive Income

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income.”  The objective of this update is to improve the comparability, consistency, and transparency of financial reporting to increase the prominence of items reported in other comprehensive income.  This update requires that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements.  The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Goodwill Impairment Testing

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles–Goodwill and Other (Topic 350) – Testing Goodwill for Impairment.”  The objective of this update is to simplify how entities test goodwill for impairment.  The amendments in the update permit an entity to first assess 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 described in Topic 350.  The amendments in this update are effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  Early adoption is permitted.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

41

TITAN INTERNATIONAL, INC.

Management’s Discussion and Analysis of

Financial Condition and Results of Operations

MARKET CONDITIONS AND OUTLOOK

In the first nine months of 2011, Titan experienced significantly higher sales when compared to the first nine months of 2010.  The higher sales were primarily the result of increased demand and price increases in all of the Company’s segments, as well as additional sales resulting from the acquisition of Goodyear’s Latin American farm tire business and accompanying supply agreements.  For the remainder of 2011, the Company expects sales to continue at strong levels.

Energy, raw material and petroleum-based product costs have been volatile and may negatively impact the Company’s margins.  Many of Titan’s overhead expenses are fixed; therefore, lower seasonal trends may cause negative fluctuations in quarterly profit margins and affect the financial condition of the Company.

The labor agreements for the Company’s Bryan, Ohio and Freeport, Illinois, facilities expired on November 19, 2010, for the employees covered by their respective collective bargaining agreements, which account for approximately 31% of Titan employees in the United States.  As of September 30, 2011, the employees of these two facilities were working without a contract under the terms of the Company’s latest offer.  The respective unions have retained their rights to challenge the Company’s actions.

AGRICULTURAL MARKET OUTLOOK

Agricultural market sales were significantly higher in the first nine months of 2011 when compared to the first nine months of 2010.  The addition of Goodyear’s Latin American farm tire business, prices increases, and continued strong demand contributed to the higher sales levels.  The increase in the global population and the rising middle class in emerging countries may help grow future demand.  The gradual increase in the use of biofuels may help sustain future production.  Many variables, including weather, grain prices, export markets and future government policies and payments can greatly influence the overall health of the agricultural economy.

EARTHMOVING/CONSTRUCTION MARKET OUTLOOK

Earthmoving and mining sales continue to improve, aided by increases in metals, oil and gas prices.  Although they may fluctuate in the short-term, in the long-term these prices are expected to remain at levels that are attractive for continued investment, which should help support future earthmoving and mining sales.  The decline in the United States housing market continues to cause a lower demand for equipment used for construction.  The earthmoving/construction segment is affected by many variables, including commodity prices, road construction, infrastructure, government appropriations, housing starts and the on-going banking and credit issues.  For the remainder of 2011, the Company expects strong demand to continue.

CONSUMER MARKET OUTLOOK

Consumer market sales were significantly higher in the first nine months of 2011, when compared to previous years.  The increase in net sales was primarily the result of the Goodyear Latin American farm tire acquisition agreement, which included supply agreements for certain non-agricultural product sales, which are included in the consumer segment.  The supply agreement sales, which currently make up a large portion of consumer market sales, may fluctuate from period to period.

42

TITAN INTERNATIONAL, INC.

PART I. FINANCIAL INFORMATION

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

See the Company’s 2010 Annual Report filed on Form 10-K (Item 7A).  There has been no material change in this information.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s principal executive officer and principal financial officer have concluded the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the Exchange Act)) were not effective as of September 30, 2011, as a result of the material weakness related to the valuation of Gen 1 tires as discussed below.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statement will not be prevented or detected on a timely basis.  Based on management’s reassessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010, management concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2010, due to the fact that there was a material weakness related to its accounting for inventory.  Specifically, the Company’s control with respect to its valuation of certain tire inventory (Gen 1) did not accurately calculate the decline in value as of December 31, 2010.  This control deficiency resulted in the restatement of the Company’s 2010 annual consolidated financial statements and its interim financial information for the quarterly periods ended March 31 and June 30, 2011.  If not remediated, this control deficiency could result in future material misstatement to inventory and cost of goods sold within the Company’s financial statements.

Remediation Plan

Management and the Board of Directors are committed to the continued improvement of the Company’s overall system of internal control over financial reporting.  Management believes the remediation measures described below will remediate the identified control deficiency and strengthen the Company’s internal control over financial reporting.

Management will implement the following measures to remediate the internal control deficiency with respect to its valuation of Gen 1 inventory.

·   The methodology for computing the market value of the Gen 1 inventory will be re-evaluated to accurately calculate the market value of the Gen 1 inventory.  To enhance this methodology, the Company will utilize more critical analysis of relevant market information used to determine inventory market value.

·   When calculating the market value of the Gen 1 inventory, the Company will use input from a variety of Titan personnel including management, accounting, and sales, as well as any information available to Titan from outside sources.

Changes in Internal Controls

There were no material changes in internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the third quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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

43

TITAN INTERNATIONAL, INC.

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The Company is a party to routine legal proceedings arising out of the normal course of business.  Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes at this time that none of these actions, individually or in the aggregate, will have a material adverse affect on the consolidated financial condition, results of operations or cash flows of the Company.  However, due to the difficult nature of predicting unresolved and future legal claims, the Company cannot anticipate or predict the material adverse effect on its consolidated financial condition, results of operations or cash flows as a result of efforts to comply with or its liabilities pertaining to legal judgments.

Item 1A.  Risk Factors

See the Company’s 2010 Annual Report filed on Form 10-K (Item 1A).  There has been no material change in this information.

Item 5.    Other Information

On August 8, 2011, Titan Tire Corporation, a subsidiary of the Company entered into a Supply Agreement with Deere & Company (“Deere”), effective as of April 15, 2011 (the “Agreement”).  Under Agreement, Titan Tire Corporation has agreed to supply Deere with certain tires and parts.  The Agreement has a term expiring on April 30, 2014.

On September 23, 2011, Titan Tire Corporation entered into the First Amendment to Supply Agreement (the “Amendment”), which amended the prior agreement to, among other things, extend the term of the Agreement until April 30, 2015 and to add certain products and pricing terms.

The foregoing descriptions of the Agreement and Amendment do not contain complete summaries thereof and are qualified in their entirety to the full text of those agreements which are filed herewith as Exhibits 10.1 and 10.2, respectively, and are incorporated to this Item 5 by reference.

Item 6.   Exhibits

10.1	Supply Agreement with Deere & Company – August 2011 *
10.2	First Amendment to Supply Agreement with Deere & Company – September 2011 *
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Confidential treatment has been requested with respect to certain portions of this exhibit.  Omitted portions have been filed separately with the Securities and Exchange Commission.

44

TITAN INTERNATIONAL, INC.

PART II. OTHER INFORMATION

SIGNATURES

Pursuant to the requirements 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.

TITAN INTERNATIONAL, INC.

(Registrant)

Date:	November 9, 2011	By:	/s/ MAURICE M. TAYLOR JR.
			Maurice M. Taylor Jr.
			Chairman and Chief Executive Officer (Principal Executive Officer)

By:	/s/ PAUL G. REITZ
	Paul G. Reitz
	Chief Financial Officer
	(Principal Financial Officer)

45

EX-10.1

Exhibit 10.1

SUPPLY AGREEMENT

This Supply Agreement (“Agreement”) is effective as of April 15, 2011 (“Effective Date”) and is entered between Titan Tire Corporation, an Illinois corporation with its principal place of business in Des Moines, Iowa (“Titan”) and Deere & Company, a Delaware corporation, with its principal place of business in Moline, Illinois (“Deere”), One John Deere Place, Moline, Illinois 61265, acting through its affiliates and business units:  John Deere Waterloo Works, 3500 East Donald Street, Waterloo, Iowa;  John Deere Harvester Works, 1100 13th Avenue, East Moline, Illinois;  Industrias John Deere S.A. de C.V., Blvd Diaz Ordaz #500, Garza Garcia, Nuevo Leon, Mexico;  John Deere Ottumwa Works, 928 E. Vine Street; Ottumwa, Iowa;  John Deere Seeding Works, 501 River Drive, Moline, Illinois;  John Deere Commercial Products (Augusta), 700 Horizon South Parkway, Grovetown, Georgia; John Deere Valley City Works, 1725 7th Street SE, Valley City, North Dakota; John Deere Thibodaux, 244 Highway 3266, Thibodaux, Louisiana; John Deere Des Moines Work, 825 SW Irvinedale Drive, Ankeny, Iowa; John Deere Construction & Forestry Equipment Business Unit: John Deere Dubuque Works, 18600 South John Deere Road, Dubuque, Iowa 52001-9757 and Business Unit: John Deere Davenport Works P.O. Box 4198, Davenport, Iowa 52808-4198.

The above listed business units are individually a “Deere Affiliate” and collectively the “Deere Affiliate.”  The terms of this Agreement shall apply to the purchase of products by any Deere Affiliate unless the Deere Affiliate and Titan agree otherwise, or unless a separate agreement exists between the Deere Affiliate and Titan.  The purchase order will act as a signature of the Deere Affiliate accepting the terms of this Agreement.  Deere shall retain the primary responsibility for administering this Agreement.

By mutual agreement of Deere and Titan, this section may be amended to include other affiliated corporations and business units of Deere.

WHEREAS, Deere wishes to purchase certain Products, as hereinafter defined, manufactured by Titan which will then be incorporated into wholegoods equipment or sold as replacement parts by Deere and its dealers.

WHEREAS, Titan wants to sell Deere the Products that Titan manufactures.

NOW THEREFORE, the parties agree as follows:

1.   PRODUCTS – As used herein, the term “products” shall mean those tires and parts listed on Attachment I, attached hereto and incorporated herein by reference and to any other products which may be added to Attachment I by Deere and Titan from time to time by mutual agreement.

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

2.   PURCHASES –Titan agrees to sell to Deere and Deere agrees to buy from Titan ** listed on Attachment I, recognizing that this is **. To help with Titan capacity planning, Deere agrees to meet quarterly to review **.

3.   TERM – This agreement will commence as of the Effective Date and will continue through April 30, 2014, contingent upon satisfactory performance of contractual terms and conditions by Titan and subject to the provisions of Section 21.  This agreement may be extended for a mutually agreeable period of time by written agreement of both parties; provided that both parties advise one another in writing six months prior to the expiration extended period.  The terms and conditions of this agreement would apply to any extension or renewal.

4.   FORECASTS AND ORDERS – Purchases under this Agreement shall be made against specific written purchase orders submitted by Deere to Titan from time to time during the term of this Agreement.  Any forecast for products provided by Deere shall not be considered orders for Products, shall be used by Titan for general corporate planning purposes only, and may be disregarded by without prior notice to Titan.  Forecast orders do not constitute a contractual obligation on Titan or Deere’s part unless the parties have agreed otherwise in writing.  Deere shall issue a ** firm schedule along with a ** tentative schedule.  The tentative schedule shall be revised continuously and reconfirmed by Deere.  Deere will deliver to Titan orders for Products on order formats utilized by Deere which will specify the quantity of each Product ordered and the date by which the Product must be provided to said Deere facility.  The order shall constitute a binding commitment by Deere to purchase the Products specified therein on the terms and conditions herein.

5.   DELIVERY – Titan shall deliver the Products ordered to the designated Deere facility, or its designee on the delivery date set forth in the order.  Time is of the essence in delivered Product.  If a Product will not be delivered on or before the delivery date specified in the order, Titan must immediately notify the applicable Deere facility that it will not be delivered in a timely manner.

6.   FREIGHT – The Products shall be shipped FOB Titan facilities to designated Deere location and on a carrier designated by Deere.  Deere will be liable for all such transportation expenses.  In the event that a late delivery is Titan’s responsibility, Titan may be liable for expedited freight premiums incurred to meet Deere factory production schedules.

7.   PACKAGING – Titan shall package the Products so that the Products will not be damaged or destroyed in transit.  As to each Product shipment, Titan must include a packing list specifying the Product number(s), the quantity of each Product, the order number, release number, and/or blanket purchase order number, if applicable, and any other information Deere requires.

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

8.   PRICING – During the term of this Agreement, the price of these products shall be the applicable price set forth in Attachment I, except as otherwise provided herein.  Titan and Deere agree that raw materials impact the cost of tires, and further agree to review on a ** basis **, published raw material indices for **, with the stated intent to adjust tire prices accordingly.  The ** is as shown in Attachment 2, and additional details regarding pricing mechanisms are listed in Attachment 3.   Upon Deere’s request, Titan will provide documentation requested relative to any price adjustment.  Titan will provide Deere with its adjustment request no later than **.

For pricing shown in Exhibit A, Seller shall guarantee ** on the total value of the Agreement for each of the following periods:

**

The JD CROPS already submitted ** will be counted toward the **.  The JD CROP **.  Purchaser commits Engineering and Supply Management resources for VI (“Value Improvement”) sessions ** with Seller **.  Upon completion by Purchaser and Seller, these projects shall be **.  If implemented projects do not result in meeting the ** goal, the Seller shall **.  Reviews will be completed and any applicable price adjustments will take place on **.

9.   PAYMENT – Titan will deliver to the Deere facility involved, labeled: “Attention:  Accounts Payable” or such other address designated by Deere.  The invoice will reference the order number, release number, Product number(s), quantity of each Product, proper price for each Product, total price and any other information requested by Deere.  Payment terms are net thirty (30) days.

10.   QUALITY/DEFECTS – If any Product sold to Deere is defective in material or workmanship, or does not conform to Deere’s specifications/quality requirements, Titan agrees, at its sole cost, to repair or replace the defective Product.

11.   PRODUCT INDEMNITY – Titan agrees to defend, hold harmless and indemnify Deere, its subsidiaries and affiliates, their officers, directors, employees and agents from and against any and all claims, actions, or suits, including costs, expenses, and reasonable attorney fees caused by or arising from any act or omission of Titan relating to design, defective material, or workmanship.  Titan’s obligation hereunder shall not extend to claims whereby the Products acquired by Deere from Titan were modified or altered or misused by Deere, its subsidiaries and affiliates, their officers, directors, employees or agents.  Titan’s obligation hereunder shall not extend to any claims other than those expressly stated.

12.   ENTIRE AGREEMENT – The terms of this agreement will supersede any conflicting or inconsistent terms contained in orders or attachments to this agreement and the terms and conditions of this agreement shall apply to all such orders placed by Deere.

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

13.   AMENDENTS – This agreement may be amended only by a written document signed by the parties which states that it is intended to amend this agreement.

14.   SEVERABILITY – The invalidity or unenforceability of any term of this agreement shall not affect the validity and enforceability of this agreement or any of its other terms, and this agreement and such other terms shall be construed as though the invalid or unenforceable terms(s) were not included herein.

15.   ASSIGNMENT – Neither party shall assign any rights, delegate any duties or subcontract any work under this Agreement without the other party’s prior written consent and any attempt to do so is void and has no effect.  No assignment shall relieve the assigning party of its obligations under this Agreement.

16.   BINDING EFFECT – This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

17.   NOTICES – All notices required to be given to a party under this Agreement are to be delivered to the following addresses, or any other addresses designated by the parties by notices delivered in accordance with this section:  If to Titan: Titan Tire Corporation, 2345 E. Market Street, Des Moines, IA  50317 and if to Deere:  Deere & Company, 3400 80th Street, Moline, Illinois 61265, Attn: Director, Supply Management Operations.

Any notice required or permitted under this Agreement is to be given in writing and is deemed effectively given:  (a) upon personal delivery to the party to be notified; (b) upon confirmation of receipt by fax by the party to be notified; or, (c) deposit with a reputable overnight courier, prepaid for overnight delivery addressed as set forth in this section and upon confirmation of delivery by said courier.

18.   LAW – This agreement shall be governed by and construed in accordance with the internal law of the State of Illinois.

19.   FORCE MAJEURE – Neither party shall be responsible to the other party for any delay in or failure of performance of its obligations under this agreement to the extent attributable to causes beyond its reasonable control, including but not limited to, acts of God, fires, floods, strikes, acts of any government or delays by carriers, provided that the party affected thereby gives the other parties prompt notice of the occurrence of any event which is likely to cause any such delay or failure and of its best estimate of the length of any delay and possibility that it will be unable to resume performance; and provided further that said affected party shall use its best efforts to expeditiously overcome the effects of the event and to resume performance.

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

20.   TERMINATION.

20.1  Termination for Default by Either Party.  At any time during the term of this Agreement should either party default in performing any of its material obligations hereunder, the other party may give written notice of default specifying the details thereof.  If within sixty (60) days of the receipt of such notice the defaulting party fails to cure the default, the non-defaulting party shall have the right to terminate this Agreement with regard to the particular Product materially affected by the default, of it the default materially affects all Products, the non-defaulting party shall have the right to terminate this Agreement in its entirety.  The non-defaulting party shall give the defaulting party thirty (30) days written notice from the determination of the failure to cure the default, whereupon the termination shall be effective.

20.2   Termination for Default by Titan.  Notwithstanding the foregoing, if during the term of this Agreement, Titan’s quality performance, and/or delivery performance significantly deteriorates, Deere may find Titan in default and may give written notice of such default, outlining the default and the basis for Deere’s termination.  If within sixty (60) days after such notice from Deere (the “Cure Period”), Titan has not responded to Deere’s notice of default, Deere may terminate its purchase obligations under this Agreement in whole or in part without further liability.  If during the Cure Period, Titan addresses Deere’s claims of Titan’s default to Deere’s satisfaction, Titan will not be found to be in default under this provision.  Conversely, if during the Cure Period, Titan addresses Deere’s claims of Titan’s default under this provision and said response it unsatisfactory to Deere, Deere reserves the right to terminate its purchase obligations under this Agreement in whole or in part without further liability.  If during this Agreement, Deere does not make its payments according to the terms of this Agreement, Titan may find Deere in default and terminate is obligations in whole or in part without further liability.  The failure of a party at any time to require performance by another party in no way affects its right to require such performance at any time thereafter.  In addition, no waiver by any part of the breach of any provision hereof shall constitute a waiver of any subsequent breach of the same provision, or any breach of any other provision.

20.3   Termination for Insolvency.  If either party is adjudicated as bankrupt or files a voluntary petition in bankruptcy, reorganization, readjustment, or rearrangement of its business or affairs, if a receiver is appointed for either party., if either party makes or attempts an assignment for the benefit of creditors, or if either party is unable to meet its obligations in the normal course of business as they fall due then, in accordance with applicable law, the other party shall have the right to terminate this Agreement by giving such financially distressed party thirty (30) days written notice, whereupon this Agreement shall automatically terminate.

20.4    Termination for Force Majeure.  If Force Majeure delays delivery of Products past thirty (30) days, Deere may terminate this Agreement in whole or in part without penalty upon written notice to Titan.

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

21.   REMEDIES CUMULATIVE – Each of the rights and remedies of the parties set forth in this agreement shall be cumulative with all other such rights and remedies, as well as with all rights and remedies of the parties otherwise available at law or in equity.

22.    NO PRESS RELEASE.  Unless required by law or by government regulation, it is agreed that no press release, public announcement, confirmation, or other information regarding supply orders for the Products under this Agreement, or the fact that negotiations for new products or increased quantities for existing order are occurring, will be made by Titan without the prior written approval of Deere or by Deere without the prior written approval of Titan.

23.   PROHIBITION OF USE OF DEERE NAME AND TRADEMARKS.  Titan shall not use the name of Deere & Company, Deere, John Deere, any Affiliates or derivations, trademarks, trade dress, logos or the equivalent thereof in advertising or sales materials or in any other manner whatsoever without prior express written approval of Deere.  Such prohibition includes, without limitation, the following:

(a)   Titan shall not refer to the existence of this Agreement without Deere’s prior express written approval;

(b)   Titan is not allowed to make any statement or representation whatsoever regarding Deere’s opinion of Titan’s company, product or services without Deere’s prior express written approval; and

(c)   If Deere provides prior express written approval for the use of its name, Deere further reserves the right to revoke the right to use its names at any time.  Titan is allowed to use the name Deere strictly pursuant to meeting Titan’s unilateral disclosure obligations imposed by regulatory bodies.

IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed by duly authorized representatives the day, month and year first above written.

TITAN TIRE CORPORATION                                                                      DEERE & COMPANY

/s/ William Campbell___________                                                                      /s/ Dr. Heinrich Steins____________

Name:  William Campbell                                                                      Name: Dr. Heinrich Steins

(Title): President                                                                                (Title):  Director, Supply Mgmt Operations

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

/s/ Thomas E. Knoll ______________

Name: Thomas E. Knoll

(Title):  Vice President, Supply Management

LIST OF ATTACHMENTS:

Attachment 1:  Products and Pricing

Attachment 2:  Tire Composition

Attachment 3:  Additional Pricing Mechanisms

Attachment 3-A:  Possible tire molds for future investment

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

Attachment I

**

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

Attachment II

**

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

Attachment III

The following overall additional pricing mechanisms and details are provided for Products that are purchased per this Agreement:

**

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO SUPPLY AGREEMENT

This First Amendment to Contract Number 52600 (“Amendment”) is entered on September 23, 2011 (“First Amendment Date”) by and between Deere & Company, a Delaware corporation, with offices located at One John Deere Place, Moline, IL 61265 (“Deere”), and Titan Tire Corporation, a Illinois corporation, having its principal place of business at 2345 E. Market Street, Des Moines, IA 50317-7528 (“Supplier”).

RECITALS

A.           Deere and Supplier entered into a Supply Agreement effective as of April 15, 2011 related to Deere’s purchase of certain products from Supplier (the “Agreement”): and

B.           Deere and Supplier desire to amend the Agreement as set forth herein.

AMENDMENT AND AGREEMENT

In consideration of the mutual agreements set forth herein, the parties agree as follows;

1.   Defined Terms.  Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Agreement.

2.   Amendment.  The Agreement is amended as follows:

2.1.   Amendment to Agreement Language

2.1.1.   Term.  Pursuant to Section 3 of the Agreement, the Agreement shall be extended for a period of one (1) year, thereby establishing an expiration date of April 30, 2015.

2.1.2.   Section 4 (Forecasts and Orders) of the Agreement is amended by adding the following language at the end of Section 4:

(a)   Deere shall be entitled to order and receive volumes specified by Deere of any OTR tire produced by Supplier, at the pricing agreed to in this Agreement, provided that Supplier shall be sourced a ** of each SKU set forth on Attachment 1-A from the First Amendment Date through the end of the term of this Agreement.  For clarity, Attachment 1-A sets forth a listing of tires subject to this requirement and Attachment 1is amended as described in Section 2.2 of this First Amendment.  New forecasts and orders will reflect the sourcing percentage effective with **.  Deere forecasts and purchase orders will reflect the new percentage sourcing commencing with ** and beyond.

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

(b)   In the event Deere elects for any reason, including, but not limited to, insufficient supply fan other tire manufacturers, to request an increase in the sourcing percentage on any tire sizes above the originally specified percentage, Deere may, **

(c)   From the First Amendment Date through the remaining term of the Agreement, any newly added part numbers, including the ** shall become part of the Agreement and shall be purchased by Deere at the sourcing percentage **.

2.1.3.   A new Section 24 is added to the Agreement and states as follows:

By October 1, 2011, Deere shall forward the name, title, and phone number listing to Supplier of the Product Marketing Managers for Deere factories located in **).  Such listing to be updated each time it changes, and no less frequently than every six (6) months, for the remaining term of the Agreement

2.1.4.   A new Section 25 is added to the Agreement and states as follows:

Upon execution of this Amendment, Supplier shall re-commence shipping all **.  As of September 19, 2011, **.

2.2.   Amendment to Attachment.

(a)   Attachment Revision.  The last page of Attachment 1 of the Agreement, which sets forth certain percentage purchase obligations, is amended by deleting the “NA” in the row relating to “Davenport” and the column relating to “TT Percentage of Tires” and replacing the “NA” with “See Attachment 1-A.”

(b)   Attachment Addition.  Attachment 1-A, attached hereto, is made part of the Agreement.

3.   No Other Amendment. Except as expressly set forth herein, this First Amendment shall not by implication or otherwise alter, modify or amend or in any way affect any of the terms, conditions, obligations, covenants, or agreements contained in the Agreement, all of which are ratified in all respects and shall continue in full force and effect.

4.   Counterparts.  This First Amendment may be executed in counterparts; each of which when so executed and delivered shall be deemed an original and such counterparts shall constitute one instrument.

--

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

The parties have executed this First Amendment as of September 23, 2011.

Deere & Company		Titan Tire Corporation
(signature)	Owner of Contract	(signature)
(print name)		(print name)
(title)		(title)
(date signed)		(date signed)
(signature)	Global Commodity Manager / Global Supply Council Manager
(print name)
(title)
(date signed)
(signature)	Div. SSM
(print name)
(title)
(date signed)
(signature)	Director
(print name)
(title)
(date signed)
(signature)	Vice President
(print name)
(title)
(date signed)

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

Attachment 1-A

**

Portions of this exhibit were omitted and filed separately with the Secretary of the Commission pursuant to an application for confidential treatment filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.   Such portions are marked by a series of asterisks.

EX-31.1

Exhibit 31.1



CERTIFICATION

I, Maurice M. Taylor Jr., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Titan International, Inc.;

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 officer 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 officer 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 registrant’s board of directors (or persons performing the equivalent function):

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:	November 9, 2011	By:	/s/ MAURICE M. TAYLOR JR.
			Maurice M. Taylor Jr.
			Chairman and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Paul G. Reitz, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Titan International, Inc.;

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 officer 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 officer 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 registrant’s board of directors (or persons performing the equivalent function):

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:	November 9, 2011	By:	/s/ PAUL G. REITZ
			Paul G. Reitz
			Chief Financial Officer
			(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION

In connection with the Quarterly Report of Titan International, Inc. on Form 10-Q for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies that, to the best of their knowledge, this Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

TITAN INTERNATIONAL, INC.

(Registrant)

Date:	November 9, 2011	By:	/s/ MAURICE M. TAYLOR JR.
			Maurice M. Taylor Jr.
			Chairman and Chief Executive Officer
			(Principal Executive Officer)

By:	/s/ PAUL G. REITZ
	Paul G. Reitz
	Chief Financial Officer
	(Principal Financial Officer)

XML

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (USD $) In Thousands	Sep. 30, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 94,274	$ 239,500
Marketable securities	28,129	5
Accounts receivable	213,884	89,004
Inventories	183,150	118,143
Deferred income taxes	16,887	16,040
Prepaid and other current assets	31,082	18,658
Total current assets	567,406	481,350
Property, plant and equipment, net	333,575	248,054
Other assets	110,233	51,476
Total assets	1,011,214	780,880
Current liabilities
Short-term debt	8,227	0
Accounts payable	98,898	35,281
Other current liabilities	88,542	57,072
Total current liabilities	195,667	92,353
Long-term debt	317,881	373,564
Deferred income taxes	37,080	1,664
Other long-term liabilities	68,234	41,268
Total liabilities	618,862	508,849
Equity
Common stock (no par, 120,000,000 shares authorized, 44,092,997 and 37,475,288 issued, respectively)	37	30
Additional paid-in capital	378,881	300,540
Retained earnings	52,803	9,744
Treasury stock (at cost, 1,899,304 and 2,108,561 shares, respectively)	(17,446)	(19,324)
Treasury stock reserved for deferred compensation	(1,233)	(1,917)
Accumulated other comprehensive loss	(22,973)	(17,042)
Total Titan stockholders' equity	390,069	272,031
Noncontrolling interests	2,283	0
Total equity	392,352	272,031
Total liabilities and equity	$ 1,011,214	$ 780,880

XML

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $)	Sep. 30, 2011	Dec. 31, 2010
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	44,092,997	37,475,288
Treasury stock, shares (in shares)	1,899,304	2,108,561

XML

COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2011

Stockholders' Equity Note [Abstract]

Comprehensive Income (Loss)

17.  COMPREHENSIVE INCOME

Comprehensive income consisted of the following (in thousands):

	Three months ended					Nine months ended
	September 30,					September 30,
	2011			2010		2011			2010
Net income attributable to Titan	$	21,163		$	4,015	$	43,691		$	10,662
Unrealized gain (loss) on investments, net of tax		(11,433	)		5,137		2,219			8,405
Currency translation adjustment		(12,861	)		0		(9,929	)		0
Pension liability adjustments, net of tax		594			575		1,779			1,724
Comprehensive income (loss) attributable to Titan		(2,537	)		9,727		37,760			20,791
Net income attributable to noncontrolling interests		362			0		354			0
	$	(2,175	)	$	9,727	$	38,114		$	20,791

XML

Document And Entity Information (USD $)	9 Months Ended
	Sep. 30, 2011	Oct. 31, 2011	Jun. 30, 2010
Entity Registrant Name	TITAN INTERNATIONAL INC
Entity Central Index Key	0000899751
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 321,000,000
Entity Common Stock, Shares Outstanding		42,202,681
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011

XML

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2011

Fair Value Disclosures [Abstract]

Fair Value Measurements

20.  FAIR VALUE MEASUREMENTS

ASC 820 Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers are defined as:

Level 1 – Quoted prices in active markets for identical instruments;

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable.

Level 3 – Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis consisted of the following (in thousands):

	September 30, 2011						December 31, 2010
	Total		Level 1		Levels 2&3		Total		Level 1		Levels 2&3
Marketable securities	$	28,129	$	28,129	$	0	$	0	$	0	$	0
Investment in Titan Europe Plc		27,979		27,979		0		22,693		22,693		0
Investments for contractual obligations		11,585		11,585		0		11,168		11,168		0
Total	$	67,693	$	67,693	$	0	$	33,861	$	33,861	$	0

XML

PROPERTY, PLANT AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2011

Property, Plant, and Equipment, Net

Property, Plant, and Equipment, Net

6.  PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following (in thousands):

	September 30,			December 31,
	2011			2010
Land and improvements	$	19,416		$	3,061
Buildings and improvements		118,320			98,233
Machinery and equipment		452,638			383,231
Tools, dies and molds		87,230			84,134
Construction-in-process		13,580			8,741
		691,184			577,400
Less accumulated depreciation		(357,609	)		(329,346	)
	$	333,575		$	248,054

Depreciation on fixed assets for the three months ended September 30, 2011 and 2010, totaled $11.1 million and $8.4 million, respectively.  Depreciation on fixed assets for the nine months ended September 30, 2011 and 2010, totaled $31.4 million and $25.7 million, respectively.

XML

LITIGATION

9 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure [Abstract]

Litigation

22.  LITIGATION

The Company is a party to routine legal proceedings arising out of the normal course of business.  Although it is not possible to predict with certainty the outcome of these unresolved legal actions or the range of possible loss, the Company believes at this time that none of these actions, individually or in the aggregate, will have a material adverse affect on the consolidated financial condition, results of operations or cash flows of the Company.  However, due to the difficult nature of predicting unresolved and future legal claims, the Company cannot anticipate or predict the material adverse effect on its consolidated financial condition, results of operations or cash flows as a result of efforts to comply with or its liabilities pertaining to legal judgments.

XML

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2011

Earnings Per Share

Earnings Per Share

19.  EARNINGS PER SHARE

Earnings per share (EPS) are as follows (amounts in thousands, except per share data):

	Three months ended,
	September 30, 2011						September 30, 2010
	Titan Net Income		Weighted average shares		Per share amount		Titan Net Income		Weighted average shares		Per share amount
Basic EPS	$	21,163		42,028	$	.50	$	4,015		34,868	$	.12
Effect of stock options/trusts		0		238				0		529
Effect of convertible notes		1,091		10,795				1,598		16,376
Diluted EPS	$	22,254		53,061	$	.42	$	5,613		51,773	$	.11

	Nine months ended,
	September 30, 2011						September 30, 2010
	Titan Net Income		Weighted average shares		Per share amount		Titan Net Income		Weighted average shares		Per share amount
Basic EPS	$	43,691		41,512	$	1.05	$	10,662		34,819	$	.31
Effect of stock options/trusts		0		287				0		545
Effect of convertible notes		3,385		11,171				4,827		16,376
Diluted EPS	$	47,076		52,970	$	.89	$	15,489		51,740	$	.30

There were no stock options/trusts or convertible notes that were antidilutive for the periods presented.

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DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Derivative Financial Instruments

11.  DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses a financial derivative to mitigate its exposure to volatility in the interest rate and foreign currency exchange rate in Brazil.  The Company uses this derivate instrument to hedge exposure in the ordinary course of business and does not invest in derivative instruments for speculative purposes.  In order to reduce interest rate and foreign currency risk on the BoA Term Loan, the Company entered into an interest rate swap agreement and cross currency swap transaction with Bank of America Merrill Lynch Banco Multiplo S.A. that is designed to convert the outstanding $5.0 million US Dollar based LIBOR loan to a Brazilian Real based CDI loan.  The Company has not designated this agreement as a hedging instrument.  Changes in the fair value of the cross currency swap are recorded in other income (expense) and changes in the fair value of the interest rate swap agreement are recorded as interest expense (or gain as an offset to interest expense).  For the three months ended September 30, 2011, the Company recorded interest expense of $0.1 million related to this derivative.  For the nine months ended September 30, 2011, the Company recorded interest expense of $0.2 million related to this derivative.

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ACQUISITIONS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Business Combination Disclosure

2. ACQUISITIONS

Acquisition of AII Holding, Inc.

On April 1, 2011, Titan purchased a 70% controlling interest in AII Holding, Inc. (AII) for $1.3 million of Titan stock and payment of $2.3 million for AII’s debt.  The fair value of the identified assets acquired less liabilities assumed exceeded the fair value of the consideration transferred and noncontrolling interest.  Therefore, a bargain purchase gain of $0.9 million was recorded on the transaction.  

Acquisition of Goodyear’s Latin American Farm Tire Business

On April 1, 2011, Titan closed on the acquisition of The Goodyear Tire & Rubber Company’s (Goodyear) Latin American farm tire business for approximately $98.6 million U.S. dollars, subject to post-closing conditions and adjustments.  In addition, there were approximately $1.3 million of acquisition related costs recorded as selling, general and administrative costs during the nine months ended September 30, 2011.  The transaction includes Goodyear’s Sao Paulo, Brazil manufacturing plant, property, equipment; inventories; a licensing agreement that allows Titan to sell Goodyear-brand farm tires in Latin America for seven years; and extends the North American licensing agreement for seven years.  Net sales and net income before taxes from the acquisition date included in the statement of operations was $185.9 million and $11.5 million, respectively.

The Company funded the acquisition with cash on hand.  The purchase price was allocated to the assets acquired and liabilities assumed based on their fair values.  Inventory was valued using the comparative sales method.  Real and personal property was valued at fair value.  The excess of the purchase price over the identifiable assets acquired and liabilities assumed was reflected as goodwill.  The goodwill was allocated to the agricultural segment.  The Company continues to evaluate the preliminary purchase price allocation, primarily the value of certain deferred taxes and goodwill, and may revise the purchase price allocation in future periods as these estimates are finalized.

The preliminary purchase price allocation of the Latin American farm tire business consisted of the following  (in thousands):

Cash	$	1,018
Inventories		14,562
Prepaid & other current assets		4,929
Property, plant & equipment		108,905
Goodwill		21,388
Other assets		39,263
Other current liabilities		(21,127	)
Deferred income taxes		(29,477	)
Other noncurrent liabilities		(40,823	)
Net assets acquired	$	98,638

The preliminary purchase price allocation includes $42.5 million for prepaid royalty.  The prepaid royalty is for a seven year period and was calculated using a 2% royalty discounted at a 10% rate.  The prepaid royalty and discount will be amortized over the seven year period of the agreement.  The current portion of the prepaid royalty was $3.9 million and is included in prepaid & other current assets.  The noncurrent portion of the prepaid royalty was $38.6 million and is included in other assets.  At September 30, 2011, the current balance of the prepaid royalty was $4.1 million and the noncurrent balance of the prepaid royalty was $35.0 million.

The preliminary purchase price allocation includes $53.9 million for supply agreement liability which was valued using the incremental income method.  The supply agreement liability was recorded as the supply agreements are for sales at below market prices.  The liability will be amortized with an offset to cost of sales over the three year life of the agreement.  The current portion of the supply agreement was $18.0 million and is included in other current liabilities.  The noncurrent portion of the supply agreement was $35.9 million and is included in other noncurrent liabilities.  At September 30, 2011, the current balance of the supply agreement liability was $15.8 million and the noncurrent balance of the supply agreement liability was $23.6 million.

Pro forma financial information

The following unaudited pro forma financial information gives effect to the acquisition of Goodyear’s Latin American farm tire business as if the acquisition had taken place on January 1, 2010.  The pro forma financial information for the Sao Paulo, Brazil manufacturing facility was derived from The Goodyear Tire & Rubber Company’s historical accounting records.  These amounts have been calculated by adjusting the historical results of the Sao Paulo, Brazil facility to reflect the additional depreciation and the amortization of the prepaid royalty discount and supply agreement liability assuming the fair value adjustments had taken place.

Pro forma financial information for the three and nine months ended September 30, 2011 and 2010, is as follows :

(in thousands, except per share data)	Three months ended				Nine months ended
	September 30,				September 30,
	2011		2010		2011		2010
Net sales	$	398,805	$	250,818	$	1,112,481	$	732,922
Net income		21,525		8,936		48,175		25,426
Net income attributable to Titan		21,163		8,936		47,821		25,426
Basic earnings per share	$	.50	$	.26	$	1.15	$	.73
Diluted earnings per share		.42		.20		.95		.58

The pro forma information is presented for illustrative purposes only and may not be indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2010, nor is it necessarily indicative of Titan’s future consolidated results of operations or financial position.

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GOODWILL

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Goodwill

8.  GOODWILL

Changes in goodwill consisted of the following (in thousands):

	2011			2010
Agricultural segment
Goodwill balance, January 1	$	0		$	0
Acquisitions		21,388			0
Foreign currency translation		(2,640	)		0
Goodwill balance, September 30	$	18,748		$	0

The Company’s goodwill balance is related to the acquisition of Goodyear’s Latin American farm tire business which included the Sao Paulo, Brazil manufacturing facility.  The Company is in the process of finalizing the preliminary purchase price allocation for the acquisition.  The final amount of goodwill recorded on this transaction may be adjusted based on the finalized purchase price allocation.  Goodwill is included as a component of other assets in the Consolidated Condensed Balance Sheets.

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EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2011

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

13.  EMPLOYEE BENEFIT PLANS

The Company has three frozen defined benefit pension plans and one defined benefit plan that previously purchased a final annuity settlement.  The Company also sponsors four 401(k) retirement savings plans.  The Company expects to contribute approximately $0.6 million to the frozen pension plans during the remainder of 2011.

The components of net periodic pension cost consisted of the following (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Interest cost	$	1,272		$	1,300		$	3,816		$	3,900
Expected return on assets		(1,314	)		(1,227	)		(3,944	)		(3,681	)
Amortization of unrecognized prior service cost		34			34			102			102
Amortization of unrecognized deferred taxes		(14	)		(14	)		(42	)		(42	)
Amortization of net unrecognized loss		937			907			2,809			2,721
Net periodic pension cost	$	915		$	1,000		$	2,741		$	3,000

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WARRANTY

9 Months Ended

Sep. 30, 2011

Warranty

Warranty

9.  WARRANTY

Changes in the warranty liability consisted of the following (in thousands):

	2011			2010
Warranty liability, January 1	$	12,471		$	9,169
Provision for warranty liabilities		18,052			12,469
Warranty payments made		(14,979	)		(11,181	)
Warranty liability, September 30	$	15,544		$	10,457

The Company provides limited warranties on workmanship on its products in all market segments.  The majority of the Company’s products have a limited warranty that ranges from zero to ten years, with certain products being prorated after the first year.  The Company calculates a provision for warranty expense based on past warranty experience.  Warranty accruals are included as a component of other current liabilities on the Consolidated Condensed Balance Sheets.

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INVESTMENT IN TITAN EUROPE PLC

9 Months Ended

Sep. 30, 2011

Summary of Investments, Other than Investments in Related Parties [Abstract]

Investment in Titan Europe Plc

7.  INVESTMENT IN TITAN EUROPE PLC

Investment in Titan Europe Plc consisted of the following (in thousands):

	September 30,		December 31,
	2011		2010
Investment in Titan Europe Plc	$	27,979	$	22,693

Titan Europe Plc is publicly traded on the AIM market in London, England.  The Company’s investment in Titan Europe represents a 21.8% ownership percentage.  The Company has considered the applicable guidance in Accounting Standards Codification (ASC) 323 Investments – Equity Method and Joint Ventures and has concluded that the Company’s investment in Titan Europe Plc should be accounted for as an available-for-sale security and recorded at fair value in accordance with ASC 320 Investments – Debt and Equity Securities as the Company does not have significant influence over Titan Europe Plc.  The investment in Titan Europe Plc is included as a component of other assets on the Consolidated Condensed Balance Sheets.  Titan’s cost basis in Titan Europe Plc is $5.0 million.  Titan’s accumulated other comprehensive income includes a gain on the Titan Europe Plc investment of $14.9 million, which is net of tax of $8.0 million.  The increased value in the Titan Europe Plc investment at September 30, 2011, was due primarily to a higher publicly quoted Titan Europe Plc market price.

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Consolidated Condensed Statements of Cash Flows (Unaudited) [Abstract]
Net income	$ 44,045	$ 10,662
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization	32,753	27,617
Deferred income tax provision	8,038	8,043
Noncash convertible debt conversion charge	16,135	0
Stock-based compensation	1,748	0
Issuance of treasury stock under 401(k) plan	411	382
Gain on acquisition	(919)	0
Loss on senior note repurchase	0	3,195
(Increase) decrease in current assets, net of acquisitions:
Accounts receivable	(132,294)	(46,627)
Inventories	(47,366)	(25,840)
Prepaid and other current assets	(9,456)	6,451
Other assets	2,870	(458)
Increase (decrease) in current liabilities, net of acquisitions:
Accounts payable	69,540	22,889
Other current liabilities	10,224	(1,740)
Other liabilities	(7,412)	3,074
Net cash provided by (used for) operating activities	(11,683)	7,648
Cash flows from investing activities:
Capital expenditures	(17,901)	(20,056)
Acquisitions, net of cash acquired	(99,118)	0
Purchases of marketable securities	(30,000)	0
Other	1,941	91
Net cash used for investing activities	(145,078)	(19,965)
Cash flows from financing activities:
Repurchase of senior unsecured notes	(1,064)	(56,674)
Payment on debt	(629)	0
Term loan borrowing	14,148	0
Proceeds from exercise of stock options	477	240
Payment of financing fees	0	(586)
Dividends paid	(598)	(530)
Net cash provided by (used for) financing activities	12,334	(57,550)
Effect of exchange rate changes on cash	(799)	0
Net decrease in cash and cash equivalents	(145,226)	(69,867)
Cash and cash equivalents at beginning of period	239,500	229,182
Cash and cash equivalents at end of period	$ 94,274	$ 159,315

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MARKETABLE SECURITIES

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Marketable Securities Text Block

3.  MARKETABLE SECURITIES

Marketable securities are recorded at fair value and consisted of the following (in thousands):

	As of September 30, 2011
			Unrealized		Unrealized			Recorded
	Cost		Gains		Losses			Basis
Money market funds	$	6	$	0	$	0		$	6
Preferred stocks		2,551		0		(156	)		2,395
Common stocks		27,444		229		(1,945	)		25,728
Total	$	30,001	$	229	$	(2,101	)	$	28,129

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ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2011

Receivables [Abstract]

Accounts Receivable

4.  ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following (in thousands):

	September 30,			December 31,
	2011			2010
Accounts receivable	$	218,250		$	92,893
Allowance for doubtful accounts		(4,366	)		(3,889	)
Accounts receivable, net	$	213,884		$	89,004

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RECENTLY ISSUED ACCOUNTING STANDARDS

9 Months Ended

Sep. 30, 2011

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued Accounting Standards

21.  RECENTLY ISSUED ACCOUNTING STANDARDS

Business Combinations

In December 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2010-29, “Business Combinations (Topic 805) – Disclosure of Supplementary Pro Forma Information for Business Combinations.”  This update addresses diversity in practice about the interpretation of the pro forma revenue and earnings disclosure requirements for business combinations.  The amendments in this update specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  The amendments in this update also expand the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.  The amendments in this update were effective prospectively for business combinations for which the acquisition date was on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.  The adoption of this guidance did not have a material effect on the Company’s financial position, results of operations or cash flows.

Fair Value Measurement

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  This update establishes common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRS).  The amendments in this update are effective during interim and annual periods beginning after December 15, 2011.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Comprehensive Income

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income.”  The objective of this update is to improve the comparability, consistency, and transparency of financial reporting to increase the prominence of items reported in other comprehensive income.  This update requires that all nonowner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements.  The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Goodwill Impairment Testing

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles–Goodwill and Other (Topic 350) – Testing Goodwill for Impairment.”  The objective of this update is to simplify how entities test goodwill for impairment.  The amendments in the update permit an entity to first assess 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 described in Topic 350.  The amendments in this update are effective for interim and annual goodwill impairment tests performed for fiscal years beginning after December 15, 2011.  Early adoption is permitted.  The adoption of this update is not expected to have a material effect on the Company’s financial position, results of operations or cash flows.

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LEASE COMMITMENTS

9 Months Ended

Sep. 30, 2011

Leases, Operating [Abstract]

Lease Commitments

12.  LEASE COMMITMENTS

The Company leases certain buildings and equipment under operating leases.  Certain lease agreements provide for renewal options, fair value purchase options, and payment of property taxes, maintenance and insurance by the Company.

At September 30, 2011, future minimum commitments under noncancellable operating leases with initial or remaining terms of at least one year were as follows (in thousands):

October 1 – December 31, 2011	$	174
2012		395
2013		343
2014		244
Thereafter		0
Total future minimum lease payments	$	1,156

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INVENTORIES

9 Months Ended

Sep. 30, 2011

Inventory Disclosure [Abstract]

Inventories

5.  INVENTORIES

Inventories consisted of the following (in thousands):

	September 30,			December 31,
	2011			2010
				As Restated
Raw materials	$	97,419		$	56,414
Work-in-process		28,458			16,860
Finished goods		68,470			49,841
		194,347			123,115
Adjustment to LIFO basis		(11,197	)		(4,972	)
	$	183,150		$	118,143

At September 30, 2011, approximately 32% of the Company’s inventories were valued under the last-in, first-out (LIFO) method.  At December 31, 2010, approximately 39% of the Company’s inventories were valued under the LIFO method.  The remaining inventories were valued under the first-in, first-out (FIFO) method or average cost method.  All inventories are valued at lower of cost or market.

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OTHER INCOME

9 Months Ended

Sep. 30, 2011

Other Income and Expenses [Abstract]

Other Income

15.  OTHER INCOME

Other income consisted of the following (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Discount amortization on prepaid royalty	$	1,041		$	0		$	2,120		$	0
Gain on purchase transaction		0			0			919			0
Interest income		119			92			357			266
Investment gain (loss) on contractual obligations		(1,255	)		638			(1,111	)		285
Other expense		(461	)		(329	)		(378	)		(244	)
	$	(556	)	$	401		$	1,907		$	307

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SUBSIDIARY GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2011

Guarantees [Abstract]

Subsidiary Guarantor Financial Information

23.  SUBSIDIARY GUARANTOR FINANCIAL INFORMATION

The Company’s 5.625% convertible senior subordinated notes are guaranteed by the following 100% owned subsidiaries of the Company:  Titan Tire Corporation, Titan Tire Corporation of Bryan, Titan Tire Corporation of Freeport, Titan Tire Corporation of Texas, Titan Wheel Corporation of Illinois, and Titan Wheel Corporation of Virginia.  The note guarantees are full and unconditional, joint and several obligations of the guarantors.  The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions.  The following condensed consolidating financial statements are presented using the equity method of accounting for the parent and guarantor subsidiaries.  Certain sales & marketing expenses recorded by non-guarantor subsidiaries have not been allocated to the guarantor subsidiaries.

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	299,695		$	99,110		$	0		$	398,805
Cost of sales		380			255,509			89,922			0			345,811
Gross profit (loss)		(380	)		44,186			9,188			0			52,994
Selling, general and administrative expenses		(4,443	)		2,467			10,524			0			8,548
Research and development expenses		0			796			0			0			796
Royalty expense		0			1,620			643			0			2,263
Income (loss) from operations		4,063			39,303			(1,979	)		0			41,387
Interest expense		(6,114	)		0			(502	)		0			(6,616	)
Other income (expense)		(552	)		5			(9	)		0			(556	)
Income (loss) before income taxes		(2,603	)		39,308			(2,490	)		0			34,215
Provision (benefit) for income taxes		(988	)		14,605			(927	)		0			12,690
Equity in earnings of subsidiaries		23,140			(127	)		127			(23,140	)		0
Net income (loss)		21,525			24,576			(1,436	)		(23,140	)		21,525
Net income attributable to noncontrolling interests		0			0			0			362			362
Net income (loss) attributable to Titan	$	21,525		$	24,576		$	(1,436	)	$	(23,502	)	$	21,163

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	222,818		$	0		$	0		$	222,818
Cost of sales		387			194,077			408			0			194,872
Gross profit (loss)		(387	)		28,741			(408	)		0			27,946
Selling, general and administrative expenses		4,843			1,967			5,227			0			12,037
Research and development expenses		0			1,112			0			0			1,112
Royalty expense		0			2,275			0			0			2,275
Income (loss) from operations		(5,230	)		23,387			(5,635	)		0			12,522
Interest expense		(5,867	)		0			0			0			(5,867	)
Loss on senior note repurchase		(473	)		0			0			0			(473	)
Other income (expense)		377			4			20			0			401
Income (loss) before income taxes		(11,193	)		23,391			(5,615	)		0			6,583
Provision (benefit) for income taxes		(4,366	)		9,123			(2,189	)		0			2,568
Equity in earnings of subsidiaries		10,842			(69	)		69			(10,842	)		0
Net income (loss)	$	4,015		$	14,199		$	(3,357	)	$	(10,842	)	$	4,015

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	890,916		$	193,165		$	0		$	1,084,081
Cost of sales		1,282			733,379			175,820			0			910,481
Gross profit (loss)		(1,282	)		157,537			17,345			0			173,600
Selling, general and administrative expenses		15,513			7,654			27,247			0			50,414
Research and development expenses		4			2,989			0			0			2,993
Royalty expense		0			6,304			1,226			0			7,530
Income (loss) from operations		(16,799	)		140,590			(11,128	)		0			112,663
Interest expense		(18,426	)		0			(619	)		0			(19,045	)
Noncash convertible debt conversion charge		(16,135	)		0			0			0			(16,135	)
Other income (expense)		1,644			(236	)		499			0			1,907
Income (loss) before income taxes		(49,716	)		140,354			(11,248	)		0			79,390
Provision (benefit) for income taxes		(12,424	)		51,931			(4,162	)		0			35,345
Equity in earnings of subsidiaries		81,337			(260	)		260			(81,337	)		0
Net income (loss)		44,045			88,163			(6,826	)		(81,337	)		44,045
Net income attributable to noncontrolling interests		0			0			0			354			354
Net income (loss) attributable to Titan	$	44,045		$	88,163		$	(6,826	)	$	(81,691	)	$	43,691

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	648,922		$	0		$	0		$	648,922
Cost of sales		1,996			557,649			1,341			0			560,986
Gross profit (loss)		(1,996	)		91,273			(1,341	)		0			87,936
Selling, general and administrative expenses		14,624			6,617			14,767			0			36,008
Research and development expenses		0			5,039			0			0			5,039
Royalty expense		0			6,809			0			0			6,809
Income (loss) from operations		(16,620	)		72,808			(16,108	)		0			40,080
Interest expense		(19,713	)		0			0			0			(19,713	)
Loss on senior note repurchase		(3,195	)		0			0			0			(3,195	)
Other income		203			15			89			0			307
Income (loss) before income taxes		(39,325	)		72,823			(16,019	)		0			17,479
Provision (benefit) for income taxes		(15,337	)		28,401			(6,247	)		0			6,817
Equity in earnings of subsidiaries		34,650			(234	)		234			(34,650	)		0
Net income (loss)	$	10,662		$	44,188		$	(9,538	)	$	(34,650	)	$	10,662

	Consolidating Condensed Balance Sheets
(Amounts in thousands)
	September 30, 2011
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	87,932		$	8	$	6,334		$	0		$	94,274
Marketable securities		28,129			0		0			0			28,129
Accounts receivable		0			155,642		58,242			0			213,884
Inventories		0			157,659		25,491			0			183,150
Prepaid and other current assets		26,164			16,662		5,143			0			47,969
Total current assets		142,225			329,971		95,210			0			567,406
Property, plant and equipment, net		10,641			222,741		100,193			0			333,575
Investment in subsidiaries		167,434			9,057		20			(176,511	)		0
Other assets		45,174			957		64,102			0			110,233
Total assets	$	365,474		$	562,726	$	259,525		$	(176,511	)	$	1,011,214
Liabilities and Equity
Short-term debt	$	0		$	0	$	8,227		$	0		$	8,227
Accounts payable		1,976			50,008		46,914			0			98,898
Other current liabilities		15,384			41,888		31,270			0			88,542
Total current liabilities		17,360			91,896		86,411			0			195,667
Long-term debt		312,881			0		5,000			0			317,881
Other long-term liabilities		19,735			25,945		59,634			0			105,314
Intercompany accounts		(374,571	)		182,898		191,673			0			0
Titan stockholders’ equity		390,069			261,987		(83,193	)		(178,794	)		390,069
Noncontrolling interests		0			0		0			2,283			2,283
Total liabilities and equity	$	365,474		$	562,726	$	259,525		$	(176,511	)	$	1,011,214

	Consolidating Condensed Balance Sheets
(Amounts in thousands)	December 31, 2010
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
	As Restated			As Restated					As Restated			As Restated
Assets
Cash and cash equivalents	$	239,362		$	6	$	132		$	0		$	239,500
Accounts receivable		0			89,004		0			0			89,004
Inventories		0			118,143		0			0			118,143
Prepaid and other current assets		17,981			16,240		482			0			34,703
Total current assets		257,343			223,393		614			0			481,350
Property, plant and equipment, net		7,678			235,143		5,233			0			248,054
Investment in subsidiaries		33,464			9,057		20			(42,541	)		0
Other assets		22,183			869		28,424			0			51,476
Total assets	$	320,668		$	468,462	$	34,291		$	(42,541	)	$	780,880
Liabilities and Stockholders’ Equity
Accounts payable	$	1,406		$	33,473	$	402		$	0		$	35,281
Other current liabilities		16,066			39,186		1,820			0			57,072
Total current liabilities		17,472			72,659		2,222			0			92,353
Long-term debt		373,564			0		0			0			373,564
Other long-term liabilities		8,855			28,083		5,994			0			42,932
Intercompany accounts		(351,254	)		174,326		176,928			0			0
Stockholders’ equity		272,031			193,394		(150,853	)		(42,541	)		272,031
Total liabilities and stockholders’ equity	$	320,668		$	468,462	$	34,291		$	(42,541	)	$	780,880

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(18,544	)	$	12,085		$	(5,224	)	$	(11,683	)
Cash flows from investing activities:
Capital expenditures		(2,583	)		(13,514	)		(1,804	)		(17,901	)
Acquisitions, net of cash acquired		(99,118	)		0			0			(99,118	)
Purchases of marketable securities		(30,000	)		0			0			(30,000	)
Other, net		0			1,431			510			1,941
Net cash used for investing activities		(131,701	)		(12,083	)		(1,294	)		(145,078	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(1,064	)		0			0			(1,064	)
Payment on debt		0			0			(629	)		(629	)
Term loan borrowing		0			0			14,148			14,148
Proceeds from exercise of stock options		477			0			0			477
Dividends paid		(598	)		0			0			(598	)
Net cash provided by (used for) financing activities		(1,185	)		0			13,519			12,334
Effect of exchange rate changes on cash		0			0			(799	)		(799	)
Net increase (decrease) in cash and cash equivalents		(151,430	)		2			6,202			(145,226	)
Cash and cash equivalents, beginning of period		239,362			6			132			239,500
Cash and cash equivalents, end of period	$	87,932		$	8		$	6,334		$	94,274

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(10,887	)	$	18,294		$	241		$	7,648
Cash flows from investing activities:
Capital expenditures		(1,409	)		(18,353	)		(294	)		(20,056	)
Other, net		0			72			19			91
Net cash used for investing activities		(1,409	)		(18,281	)		(275	)		(19,965	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(56,674	)		0			0			(56,674	)
Payment of financing fees		(586	)		0			0			(586	)
Proceeds from exercise of stock options		240			0			0			240
Dividends paid		(530	)		0			0			(530	)
Net cash used for financing activities		(57,550	)		0			0			(57,550	)
Net increase (decrease) in cash and cash equivalents		(69,846	)		13			(34	)		(69,867	)
Cash and cash equivalents, beginning of period		229,004			11			167			229,182
Cash and cash equivalents, end of period	$	159,158		$	24		$	133		$	159,315

24.  SUBSIDIARY GUARANTOR FINANCIAL INFORMATION

The Company’s 7.875% senior secured notes are guaranteed by the following 100% owned subsidiaries of the Company:  Titan Tire Corporation, Titan Tire Corporation of Bryan, Titan Tire Corporation of Freeport, and Titan Wheel Corporation of Illinois.  The note guarantees are full and unconditional, joint and several obligations of the guarantors.  The guarantees of the guarantor subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions.  The following condensed consolidating financial statements are presented using the equity method of accounting for the parent and guarantor subsidiaries.  Certain sales & marketing expenses recorded by non-guarantor subsidiaries have not been allocated to the guarantor subsidiaries.

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	293,991		$	104,814		$	0		$	398,805
Cost of sales		380			250,021			95,410			0			345,811
Gross profit (loss)		(380	)		43,970			9,404			0			52,994
Selling, general and administrative expenses		(4,443	)		2,366			10,625			0			8,548
Research and development expenses		0			796			0			0			796
Royalty expense		0			1,620			643			0			2,263
Income (loss) from operations		4,063			39,188			(1,864	)		0			41,387
Interest expense		(6,114	)		0			(502	)		0			(6,616	)
Other income (expense)		(552	)		(212	)		208			0			(556	)
Income (loss) before income taxes		(2,603	)		38,976			(2,158	)		0			34,215
Provision (benefit) for income taxes		(988	)		14,482			(804	)		0			12,690
Equity in earnings of subsidiaries		23,140			(127	)		127			(23,140	)		0
Net income (loss)		21,525			24,367			(1,227	)		(23,140	)		21,525
Net income attributable to noncontrolling interests		0			0			0			362			362
Net income (loss) attributable to Titan	$	21,525		$	24,367		$	(1,227	)	$	(23,502	)	$	21,163

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Three Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	218,551		$	4,267		$	0		$	222,818
Cost of sales		387			189,528			4,957			0			194,872
Gross profit (loss)		(387	)		29,023			(690	)		0			27,946
Selling, general and administrative expenses		4,843			1,904			5,290			0			12,037
Research and development expenses		0			1,058			54			0			1,112
Royalty expense		0			2,275			0			0			2,275
Income (loss) from operations		(5,230	)		23,786			(6,034	)		0			12,522
Interest expense		(5,867	)		0			0			0			(5,867	)
Loss on senior note repurchase		(473	)		0			0			0			(473	)
Other income (expense)		377			(9	)		33			0			401
Income (loss) before income taxes		(11,193	)		23,777			(6,001	)		0			6,583
Provision (benefit) for income taxes		(4,366	)		9,273			(2,339	)		0			2,568
Equity in earnings of subsidiaries		10,842			(69	)		69			(10,842	)		0
Net income (loss)	$	4,015		$	14,435		$	(3,593	)	$	(10,842	)	$	4,015

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	873,352		$	210,729		$	0		$	1,084,081
Cost of sales		1,282			716,572			192,627			0			910,481
Gross profit (loss)		(1,282	)		156,780			18,102			0			173,600
Selling, general and administrative expenses		15,513			7,372			27,529			0			50,414
Research and development expenses		4			2,982			7			0			2,993
Royalty expense		0			6,304			1,226			0			7,530
Income (loss) from operations		(16,799	)		140,122			(10,660	)		0			112,663
Interest expense		(18,426	)		0			(619	)		0			(19,045	)
Noncash convertible debt conversion charge		(16,135	)		0			0			0			(16,135	)
Other income (expense)		1,644			(493	)		756			0			1,907
Income (loss) before income taxes		(49,716	)		139,629			(10,523	)		0			79,390
Provision (benefit) for income taxes		(12,424	)		51,663			(3,894	)		0			35,345
Equity in earnings of subsidiaries		81,337			(260	)		260			(81,337	)		0
Net income (loss)		44,045			87,706			(6,369	)		(81,337	)		44,045
Net income attributable to noncontrolling interests		0			0			0			354			354
Net income (loss) attributable to Titan	$	44,045		$	87,706		$	(6,369	)	$	(81,691	)	$	43,691

	Consolidating Condensed Statements of Operations
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	0		$	636,172		$	12,750		$	0		$	648,922
Cost of sales		1,996			542,351			16,639			0			560,986
Gross profit (loss)		(1,996	)		93,821			(3,889	)		0			87,936
Selling, general and administrative expenses		14,624			6,401			14,983			0			36,008
Research and development expenses		0			4,912			127			0			5,039
Royalty expense		0			6,809			0			0			6,809
Income (loss) from operations		(16,620	)		75,699			(18,999	)		0			40,080
Interest expense		(19,713	)		0			0			0			(19,713	)
Loss on senior note repurchase		(3,195	)		0			0			0			(3,195	)
Other income		203			31			73			0			307
Income (loss) before income taxes		(39,325	)		75,730			(18,926	)		0			17,479
Provision (benefit) for income taxes		(15,337	)		29,535			(7,381	)		0			6,817
Equity in earnings of subsidiaries		34,650			(234	)		234			(34,650	)		0
Net income (loss)	$	10,662		$	45,961		$	(11,311	)	$	(34,650	)	$	10,662

	Consolidating Condensed Balance Sheets
(Amounts in thousands)
	September 30, 2011
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	87,932		$	5	$	6,337		$	0		$	94,274
Marketable securities		28,129			0		0			0			28,129
Accounts receivable		0			151,751		62,133			0			213,884
Inventories		0			140,544		42,606			0			183,150
Prepaid and other current assets		26,164			16,219		5,586			0			47,969
Total current assets		142,225			308,519		116,662			0			567,406
Property, plant and equipment, net		10,641			207,672		115,262			0			333,575
Investment in subsidiaries		167,434			9,057		10			(176,501	)		0
Other assets		45,174			957		64,102			0			110,233
Total assets	$	365,474		$	526,205	$	296,036		$	(176,501	)	$	1,011,214
Liabilities and Equity
Short-term debt	$	0		$	0	$	8,227		$	0		$	8,227
Accounts payable		1,976			48,621		48,301			0			98,898
Other current liabilities		15,384			41,083		32,075			0			88,542
Total current liabilities		17,360			89,704		88,603			0			195,667
Long-term debt		312,881			0		5,000			0			317,881
Other long-term liabilities		19,735			25,883		59,696			0			105,314
Intercompany accounts		(374,571	)		113,090		261,481			0			0
Titan stockholders’ equity		390,069			297,528		(118,744	)		(178,784	)		390,069
Noncontrolling interests		0			0		0			2,283			2,283
Total liabilities and equity	$	365,474		$	526,205	$	296,036		$	(176,501	)	$	1,011,214

	Consolidating Condensed Balance Sheets
(Amounts in thousands)	December 31, 2010
	Titan					Non-
	Intl., Inc.			Guarantor		Guarantor
	(Parent)			Subsidiaries		Subsidiaries			Eliminations			Consolidated
	As Restated			As Restated					As Restated			As Restated
Assets
Cash and cash equivalents	$	239,362		$	3	$	135		$	0		$	239,500
Accounts receivable		0			85,335		3,669			0			89,004
Inventories		0			103,265		14,878			0			118,143
Prepaid and other current assets		17,981			15,937		785			0			34,703
Total current assets		257,343			204,540		19,467			0			481,350
Property, plant and equipment, net		7,678			218,999		21,377			0			248,054
Investment in subsidiaries		33,464			9,057		10			(42,531	)		0
Other assets		22,183			869		28,424			0			51,476
Total assets	$	320,668		$	433,465	$	69,278		$	(42,531	)	$	780,880
Liabilities and Stockholders’ Equity
Accounts payable	$	1,406		$	32,305	$	1,570		$	0		$	35,281
Other current liabilities		16,066			38,689		2,317			0			57,072
Total current liabilities		17,472			70,994		3,887			0			92,353
Long-term debt		373,564			0		0			0			373,564
Other long-term liabilities		8,855			28,083		5,994			0			42,932
Intercompany accounts		(351,254	)		106,523		244,731			0			0
Stockholders’ equity		272,031			227,865		(185,334	)		(42,531	)		272,031
Total liabilities and stockholders’ equity	$	320,668		$	433,465	$	69,278		$	(42,531	)	$	780,880

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2011
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(18,544	)	$	11,757		$	(4,896	)	$	(11,683	)
Cash flows from investing activities:
Capital expenditures		(2,583	)		(13,186	)		(2,132	)		(17,901	)
Acquisitions, net of cash acquired		(99,118	)		0			0			(99,118	)
Purchases of marketable securities		(30,000	)		0			0			(30,000	)
Other, net		0			1,431			510			1,941
Net cash used for investing activities		(131,701	)		(11,755	)		(1,622	)		(145,078	)
Cash flows from financing activities:
Repurchase of senior unsecured notes		(1,064	)		0			0			(1,064	)
Payment on debt		0			0			(629	)		(629	)
Term loan borrowing		0			0			14,148			14,148
Proceeds from exercise of stock options		477			0			0			477
Dividends paid		(598	)		0			0			(598	)
Net cash provided by (used for) financing activities		(1,185	)		0			13,519			12,334
Effect of exchange rate changes on cash		0			0			(799	)		(799	)
Net increase (decrease) in cash and cash equivalents		(151,430	)		2			6,202			(145,226	)
Cash and cash equivalents, beginning of period		239,362			3			135			239,500
Cash and cash equivalents, end of period	$	87,932		$	5		$	6,337		$	94,274

	Consolidating Condensed Statements of Cash Flows
(Amounts in thousands)
	For the Nine Months Ended September 30, 2010
	Titan						Non-
	Intl., Inc.			Guarantor			Guarantor
	(Parent)			Subsidiaries			Subsidiaries			Consolidated
Net cash provided by (used for) operating activities	$	(10,887	)	$	18,091		$	444		$	7,648
Cash flows from investing activities:
Capital expenditures		(1,409	)		(18,118	)		(529	)		(20,056	)
Other, net		0			42			49			91
Net cash used for investing activities		(1,409	)		(18,076	)		(480	)		(19,965	)
Cash flows from financing activities:
Repurchase of senior notes		(56,674	)		0			0			(56,674	)
Proceeds from exercise of stock options		240			0			0			240
Payment of financing fees		(586	)		0			0			(586	)
Dividends paid		(530	)		0			0			(530	)
Net cash used for financing activities		(57,550	)		0			0			(57,550	)
Net increase (decrease) in cash and cash equivalents		(69,846	)		15			(36	)		(69,867	)
Cash and cash equivalents, beginning of period		229,004			8			170			229,182
Cash and cash equivalents, end of period	$	159,158		$	23		$	134		$	159,315

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CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) (USD $) In Thousands, except Share data	Total	Common Stock [Member]	Additional paid-in capital [Member]	Retained earnings [Member]	Treasury stock [Member]	Treasury stock reserved for deferred compensation [Member]	Accumulated other comprehensive income (loss) [Member]	Noncontrolling interest [Member]
Balance, Beginning at Dec. 31, 2010	$ 272,031	$ 30	$ 300,540	$ 9,744	$ (19,324)	$ (1,917)	$ (17,042)	$ 0
Balance, Beginning (in shares) at Dec. 31, 2010		35,366,727
Comprehensive income:
Net income	44,045			43,691				354
Currency translation adjustment	(9,929)						(9,929)
Pension liability adjustments, net of tax	1,779						1,779
Unrealized gain on investments, net of tax	2,219						2,219
Comprehensive income	38,114							354
Dividends on common stock	(632)			(632)
Note conversion	73,909	7	73,902
Note conversion (in shares)		6,617,709
Exercise of stock options	477		(119)		596
Exercise of stock options (in shares)		66,375
Acquisitions	4,764		1,708		1,127			1,929
Acquisitions (in shares)		125,524
Stock-based compensation	1,748		1,748
Deferred compensation transactions	1,530		846			684
Issuance of treasury stock under 401(k) plan	411		256		155
Issuance of treasury stock under 401(k) plan (in shares)		17,358
Balance, Ending at Sep. 30, 2011	$ 392,352	$ 37	$ 378,881	$ 52,803	$ (17,446)	$ (1,233)	$ (22,973)	$ 2,283
Balance, Ending (in shares) at Sep. 30, 2011		42,193,693

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INCOME TAXES

9 Months Ended

Sep. 30, 2011

Income Tax Disclosure [Abstract]

Income Taxes

16.  INCOME TAXES

The Company recorded income tax expense of $12.7 million and $35.3 million for the three and nine months ended September 30, 2011, respectively, as compared to $2.6 million and $6.8 million for the three and nine months ended September 30, 2010.  The Company’s effective income tax rate was 45% and 39% for the nine months ended September 30, 2011 and 2010, respectively.  The Company’s 2011 income tax expense and rate differs from the amount of income tax determined by applying the U.S Federal income tax rate to pre-tax income primarily as a result of the $16.1 million noncash charge taken in connection with the exchange agreement on the Company’s convertible debt.  This noncash charge is not fully deductible for income tax purposes.

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2011

Segment Reporting [Abstract]

Segment Information

18.  SEGMENT INFORMATION

The table below presents information about certain revenues and income from operations used by the chief operating decision maker of the Company for the three and nine months ended September 30, 2011 and 2010 (in thousands):

	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
Revenues from external customers
Agricultural	$	246,456		$	170,675		$	713,721		$	497,503
Earthmoving/construction		81,078			47,848			224,484			139,161
Consumer		71,271			4,295			145,876			12,258
	$	398,805		$	222,818		$	1,084,081		$	648,922
Gross profit
Agricultural	$	39,008		$	25,283		$	133,874		$	78,201
Earthmoving/construction		8,814			2,495			28,227			10,294
Consumer		5,812			827			13,567			2,302
Unallocated corporate		(640	)		(659	)		(2,068	)		(2,861	)
	$	52,994		$	27,946		$	173,600		$	87,936
Income from operations
Agricultural	$	34,580		$	21,440		$	120,248		$	66,222
Earthmoving/construction		7,418			1,077			23,408			4,080
Consumer		3,615			734			9,352			2,030
Unallocated corporate		(4,226	)		(10,729	)		(40,345	)		(32,252	)
Income from operations		41,387			12,522			112,663			40,080
Interest expense		(6,616	)		(5,867	)		(19,045	)		(19,713	)
Noncash debt charge		0			0			(16,135	)		0
Loss on senior note repurchase		0			(473	)		0			(3,195	)
Other income (expense)		(556	)		401			1,907			307
Income before income taxes	$	34,215		$	6,583		$	79,390		$	17,479

Assets by segment were as follows (in thousands):

	September 30,		December 31,
Total Assets	2011		2010
			As Restated
Agricultural segment	$	464,908	$	304,048
Earthmoving/construction segment		192,956		171,410
Consumer segment		146,741		5,863
Unallocated corporate		206,609		299,559
	$	1,011,214	$	780,880

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ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2011

ACCOUNTING POLICIES

ACCOUNTING POLICIES

1.  ACCOUNTING POLICIES

In the opinion of Titan International, Inc. (Titan or the Company), the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature and necessary for a fair statement of the Company’s financial position as of September 30, 2011, the results of operations for the three and nine months ended September 30, 2011 and 2010, and cash flows for the nine months ended September 30, 2011 and 2010.

Accounting policies have continued without significant change and are described in the Description of Business and Significant Accounting Policies contained in the Company’s 2010 Annual Report on Form 10-K.  These interim financial statements have been prepared pursuant to the Securities and Exchange Commission’s rules for Form 10-Q’s and, therefore, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2010 Annual Report on Form 10-K.

Sales

Sales and revenues are presented net of sales taxes and other related taxes.

Marketable securities

The Company reports investments in marketable securities classified as available-for-sale at fair value.  Unrealized gains or losses on available-for-sale marketable securities are reported, net of tax, as a component of other comprehensive income.  For unrealized losses which are determined to be other-than-temporary, the loss is recorded as a component of other income (loss).  Realized gains and losses on marketable securities are recorded as a component of other income (loss).

Fair value of financial instruments

The Company records all financial instruments, including cash and cash equivalents, accounts receivable, notes receivable, accounts payable, other accruals and notes payable at cost, which approximates fair value.  Investments in marketable equity securities are recorded at fair value.  The senior secured 7.875% notes due 2017 (senior secured notes) and convertible senior subordinated 5.625% notes due 2017 (convertible notes) are carried at cost of $200.0 million and $112.9 million at September 30, 2011, respectively.  The fair value of these notes at September 30, 2011, as obtained through independent pricing sources, was approximately $210.0 million for the senior secured notes and approximately $192.4 million for the convertible notes.  The increase in the fair value of the convertible notes is due primarily to the increased value of the underlying common stock.

Cash dividends

The Company declared cash dividends of $.005 and $.015 per share of common stock for each of the three and nine months ended September 30, 2011 and 2010.  The third quarter 2011 cash dividend of $.005 per share of common stock was paid October 15, 2011, to stockholders of record on September 30, 2011.

Restatement

The Company amended its 2010 Annual Report on Form 10-K on November 9, 2011 to restate its December 31, 2010 consolidated financial statements.  The December 31, 2010 condensed balance sheet in this Form 10-Q includes the effect of this restatement.  For additional information, see the Form 10-K/A filed on November 9, 2011.

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REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

9 Months Ended

Sep. 30, 2011

Debt Disclosure [Abstract]

REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

10.  REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):

	September 30,		December 31,
	2011		2010
7.875% senior notes due 2017	$	200,000	$	200,000
5.625% convertible senior notes due 2017		112,881		172,500
Other debt		13,227		0
8% senior unsecured notes due January 2012		0		1,064
		326,108		373,564
Less:  Amounts due within one year		8,227		0
	$	317,881	$	373,564

Aggregate maturities of long-term debt at September 30, 2011, were as follows (in thousands):

October 1 – December 31, 2011	$	8,227
2012		0
2013		5,000
2014		0
2015		0
Thereafter		312,881
	$	326,108

7.875% senior secured notes due 2017

The Company’s 7.875% senior secured notes (senior secured notes) are due October 2017.  These notes are secured by the land and buildings of the following subsidiaries of the Company:  Titan Tire Corporation, Titan Wheel Corporation of Illinois, Titan Tire Corporation of Freeport, and Titan Tire Corporation of Bryan.  The Company’s senior secured notes outstanding balance was $200.0 million at September 30, 2011.

5.625% convertible senior subordinated notes due 2017

The Company’s 5.625% convertible senior subordinated notes (convertible notes) are due January 2017.  The initial base conversion rate for the convertible notes is 93.0016 shares of Titan common stock per $1,000 principal amount of convertible notes, equivalent to an initial base conversion price of approximately $10.75 per share of Titan common stock.  If the price of Titan common stock at the time of determination exceeds the base conversion price, the base conversion rate will be increased by an additional number of shares (up to 9.3002 shares of Titan common stock per $1,000 principal amount of convertible notes) as determined pursuant to a formula described in the indenture.  The base conversion rate will be subject to adjustment in certain events.  The Company’s convertible notes balance was $112.9 million at September 30, 2011.

In the first quarter of 2011, the Company closed an Exchange Agreement with a note holder of the convertible notes, pursuant to which such holder converted approximately $59.6 million in aggregate principal amount of the Convertible Notes into approximately 6.6 million shares of the Company’s common stock, plus a payment for the accrued and unpaid interest.  In connection with the exchange, the Company recognized a noncash charge of $16.1 million in accordance with ASC 470-20 Debt – Debt with Conversion and Other Options.

8% senior unsecured notes due 2012

In the first quarter of 2011, Titan satisfied and discharged the indenture relating to the 8% senior unsecured notes due January 2012 by depositing with the trustee $1.1 million cash representing the outstanding principal of such notes and interest payments due on July 15, 2011, and at maturity on January 15, 2012.  Titan irrevocably instructed the trustee to apply the deposited money toward the interest and principal of the notes.

Revolving credit facility

The Company’s $100 million revolving credit facility (credit facility) with agent Bank of America, N.A. has a January 2014 termination date and is collateralized by the accounts receivable and inventory of Titan and certain of its domestic subsidiaries.  During the first nine months of 2011 and at September 30, 2011, there were no borrowings under the credit facility.  Outstanding letters of credit were $12.0 million at September 30, 2011, leaving $88.0 million of unused availability on the credit facility.  The credit facility contains certain financial covenants, restrictions and other customary affirmative and negative covenants.  Titan is in compliance with these covenants and restrictions as of September 30, 2011.

Other debt

Brazil Term Loan

In May 2011, the Company entered into a two-year, unsecured $10.0 million Term Loan with Bank of America, N.A. (BoA term loan) to provide working capital for the Sao Paolo, Brazil manufacturing facility.  Borrowings under the BoA term loan bear interest at a rate equal to LIBOR plus 200 basis points.  The BoA term loan shall be a minimum of $5.0 million with the option for an additional $5.0 million loan for a maximum of $10.0 million.  The BoA loan is due May 2013.  The Company entered into an interest rate swap agreement and cross currency swap transaction with Bank of America Merrill Lynch Banco Multiplo S.A. that is designed to convert the outstanding $5.0 million US Dollar based LIBOR loan to a Brazilian Real based CDI loan.    See Note 11 for additional information.  As of September 30, 2011, the Company had $5.0 million outstanding on this loan and the interest rate including the effect of the swap agreement was approximately 14%.

Brazil Revolving Line of Credit

The Company’s wholly-owned Brazilian subsidiary, Titan Pneus Do Brasil Ltda (Titan Brazil), has a revolving line of credit (Brazil line of credit) established with Bank of America Merrill Lynch Banco Multiplo S.A. in May 2011 that is secured by a $12.0 million line of credit between the Company and Bank of America N.A. under the $100.0 million credit facility.  Titan Brazil could borrow up to 16.0 million Brazilian Reais, which equates to approximately $8.6 million dollars as of September 30, 2011, for working capital purposes.  Under the terms of the Brazil line of credit, borrowings, if any, bear interest at a rate of LIBOR plus 247 basis points.  At September 30, 2011 there was $7.8 million outstanding and the interest rate was approximately 3%.

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ROYALTY EXPENSE

9 Months Ended

Sep. 30, 2011

Royalty Expense [Abstract]

Royalty Expense

14.  ROYALTY EXPENSE

The Company has a trademark license agreement with Goodyear to manufacture and sell certain off-highway tires in North America and Latin America under the Goodyear name.  The North American and Latin American royalties were prepaid for seven years as a part of the Goodyear Latin American farm tire acquisition.  Royalty expenses recorded were $2.3 million and $2.3 million for the quarters ended September 30, 2011 and 2010, respectively.  Royalty expenses were $7.5 million and $6.8 million for the nine months ended September 30, 2011 and 2010, respectively.

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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) In Thousands, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Consolidated Condensed Statements of Operations (Unaudited)
Net sales	$ 398,805	$ 222,818	$ 1,084,081	$ 648,922
Cost of sales	345,811	194,872	910,481	560,986
Gross profit	52,994	27,946	173,600	87,936
Selling, general & administrative expenses	8,548	12,037	50,414	36,008
Research and development expenses	796	1,112	2,993	5,039
Royalty expense	2,263	2,275	7,530	6,809
Income from operations	41,387	12,522	112,663	40,080
Interest expense	(6,616)	(5,867)	(19,045)	(19,713)
Noncash convertible debt conversion charge	0	0	(16,135)	0
Loss on senior note repurchase	0	(473)	0	(3,195)
Other income (expense)	(556)	401	1,907	307
Income before income taxes	34,215	6,583	79,390	17,479
Provision for income taxes	12,690	2,568	35,345	6,817
Net income	21,525	4,015	44,045	10,662
Net income attributable to noncontrolling interests	362	0	354	0
Net income attributable to Titan	$ 21,163	$ 4,015	$ 43,691	$ 10,662
Earnings per common share:
Basic (in dollars per share)	$ 0.50	$ 0.12	$ 1.05	$ 0.31
Diluted (in dollars per share)	$ 0.42	$ 0.11	$ 0.89	$ 0.30
Average common shares outstanding:
Basic (in shares)	42,028	34,868	41,512	34,819
Diluted (in shares)	53,061	51,773	52,970	51,740
Dividends declared per common share:	$ 0.005	$ 0.005	$ 0.015	$ 0.015