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 2008 annual report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009.

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 acquisitions and divestitures

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, 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 the current banking and credit crisis 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

· Availability and price of raw materials

· Levels of operating efficiencies

· Actions of domestic and foreign governments

· Results of investments

· Fluctuations in currency translations

· Ability to secure financing at reasonable terms

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.

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. The earthmoving/construction market is often referred to as OTR, an acronym for off-the-road.

Consumer Market: Titan builds a variety of products for all-terrain vehicles (ATV), turf, golf and trailer applications. Titan's sales in the consumer market include sales to Goodyear, which are under an off-take/mixing agreement. This agreement includes mixed stock, which is a prepared rubber compound used in tire production. The Company provides wheels/tires and assembles brakes, actuators and components for the domestic boat, recreational and utility trailer markets.

The Company's major OEM customers include large manufacturers of off-highway equipment such as AGCO Corporation, Caterpillar Inc., 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 following table provides highlights for the quarter ended March, 2009, compared to 2008 (amounts in thousands):

                                  Three months ended March 31,
                                    2009                 2008           % Decrease
      Net sales                $      232,604       $      253,525               (8 )%
      Gross profit                     30,063               32,344               (7 )%
      Income from operations           14,077               16,120              (13 )%
      Net income                        7,041                8,134              (13 )%

The Company recorded sales of $232.6 million for the first quarter of 2009, which were 8% lower than the first quarter 2008 sales of $253.5 million. The lower sales were the result of reduced demand in the Company's earthmoving/construction market, a consequence of the worldwide recession.

The following operating results were primarily related to the lower sales levels. The Company's income from operations was $14.1 million for the first quarter of 2009, compared to $16.1 million in 2008. Net income was $7.0 million for the quarter, compared to $8.1 million in 2008. Basic earnings per share were $.20 in the first quarter of 2009, compared to $.24 in 2008.

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.

Inventories
Inventories are valued at lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method for approximately 72% of inventories and the last-in, first-out (LIFO) method for approximately 28% of inventories. The major rubber material inventory and related work-in-process and their finished goods are accounted for under the FIFO method. The major steel material inventory and related work-in-process and their finished goods are accounted for under the LIFO method. Market value is estimated based on current selling prices. Estimated provisions are established for slow-moving and obsolete inventory, as well as inventory carried above market price based on historical experience. Should experience change, adjustments to estimated provisions would be necessary.

Impairment of Goodwill
The Company reviews goodwill to assess recoverability from future operations during the fourth quarter of each annual reporting period, and whenever events and circumstances indicate that the carrying values may not be recoverable. The Company had goodwill of $11.7 million at March 31, 2009. Significant assumptions relating to future operations must be made when estimating future cash flows in analyzing goodwill for impairment. Should unforeseen events occur or operating trends change significantly, impairment losses could occur.

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 in accordance with SFAS No. 109, "Accounting for Income Taxes." The Company recognizes and measures uncertain tax positions in accordance with FIN 48, "Accounting for Uncertainty in Income Taxes."

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 relating to any intangibles recorded in the acquisition. To aid in establishing the value of any intangible assets at the time of acquisition, the Company typically engages a professional appraisal firm.

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 purchased a final annuity settlement in 2002. Titan expects to contribute approximately $1 million to these frozen defined pension plans during the remainder of 2009. For more information concerning these costs and obligations, see the discussion of the "Pensions" and Note 21 to the Company's financial statements on Form 10-K for the fiscal year ended December 31, 2008.

                           TITAN INTERNATIONAL, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

RESULTS OF OPERATIONS
Highlights for the three months ended March 31, 2009, compared to 2008 (amounts
in thousands):
                                       Three months ended March 31,
                                         2009                 2008
              Net sales             $      232,604       $      253,525
              Cost of sales                202,541              221,181
              Gross profit          $       30,063       $       32,344
              Gross profit margin             12.9 %               12.8 %

Net Sales
Net sales for the quarter ended March 31, 2009, were $232.6 million, compared to $253.5 million in 2008. The lower sales levels were primarily the result of reduced demand in the Company's earthmoving/construction market, a major consequence of the worldwide recession.

Cost of Sales and Gross Profit
Cost of sales was $202.5 million for the first quarter of 2009, compared to $221.2 million in 2008. The cost of sales decreased by approximately the same percentage as the net sales.

Gross profit for the first quarter of 2009 was $30.1 million or 12.9% of net sales, compared to $32.3 million or 12.8% of net sales for the first quarter of 2008. The gross profit margin showed a slight improvement despite the reduction in sales.

Administrative Expenses
Selling, general and administrative expenses were as follows (amounts in
thousands):
                                         Three months ended March 31,
                                           2009                 2008
Selling, general and administrative   $       13,527       $       14,077
Percentage of net sales                          5.8 %                5.6 %

Selling, general and administrative (SG&A) expenses for the first quarter of 2009 were $13.5 million or 5.8% of net sales, compared to $14.1 million or 5.6% of net sales for 2008. The Company continues to strive to achieve low administrative expenses.

Royalty Expense
Royalty expense was as follows (amounts in thousands):

The Goodyear North American farm tire asset acquisition included a license agreement with The Goodyear Tire & Rubber Company to manufacture and sell certain off-highway tires in North America under the Goodyear name. Royalty expenses were $2.5 million and $2.1 million for the first quarter of 2009 and 2008, respectively. The higher royalty expense was the result of strong sales in the agricultural segment.

                           TITAN INTERNATIONAL, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

Income from Operations
Income from operations was as follows (amounts in thousands):
                                         Three months ended March 31,
                                           2009                 2008
            Income from operations    $       14,077       $       16,120
            Percentage of net sales              6.1 %                6.4 %

Income from operations for the first quarter of 2009 was $14.1 million or 6.1% of net sales, compared to $16.1 million or 6.4% in 2008. The slight reduction in income from operations was the net result of the items previously discussed in the sales, cost of sales, administrative and royalty line items.

Interest Expense
Interest expense was as follows (amounts in thousands):

Interest expense was $3.9 million for the first quarter of 2009, compared to $4.0 million in 2008. The Company's first quarter 2009 interest expense has remained relatively consistent with that of the previous year's quarter.

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

Other income for the first quarter of 2009 was $1.4 million, compared to $1.4 million in 2008. A gain on senior note repurchases of $1.4 million was included in other income for the first quarter of 2009. Interest income included in other income was $0.1 million and $0.5 million for three months ended March 31, 2009 and 2008, respectively.

Income Taxes
Income taxes were as follows (amounts in thousands):

The Company recorded income tax expense of $4.5 million and $5.4 million for the quarters ended March 31, 2009 and 2008, respectively. The Company's effective income tax rate was 39% and 40% for the three months ended March 31, 2009 and 2008, respectively.

Net Income
Net income was as follows (amounts in thousands):

Net income for the first quarter of 2009 was $7.0 million, compared to $8.1 million in 2008. Basic earnings per share were $.20 for the first quarter of 2009, compared to $.24 in the first quarter of 2008. Diluted earnings per share were $.20 for the first quarter of 2009, compared to $.23 in 2008. The Company's net income and earnings per share decreased due to the items detailed above.

Agricultural Segment Results
Agricultural segment results were as follows (amounts in thousands):
                                         Three months ended March 31,
                                           2009                 2008
             Net sales                $      187,328       $      173,486
             Gross profit                     24,920               19,693
             Income from operations           20,085               16,443

Net sales in the agricultural market were $187.3 million for the first quarter of 2009, as compared to $173.5 million in 2008. The strong agricultural segment sales were the result of continued high demand from the Company's customers, an effect of record farm income. A primary driver for the higher sales in the agricultural segment was the high demand for large agricultural equipment.

Gross profit in the agricultural market was $24.9 million for the first quarter of 2009, compared to the $19.7 million in 2008. Income from operations in the agricultural market was $20.1 million for the first quarter of 2009, compared to $16.4 million for the first quarter of 2008. The increase in gross profit and income from operations in the agricultural market was primarily attributed to the continued strong farm equipment sales.

Earthmoving/Construction Segment Results
Earthmoving/Construction segment results were as follows (amounts in thousands):
                                         Three months ended March 31,
                                           2009                 2008
             Net sales                $       39,927       $       73,833
             Gross profit                      4,884               11,911
             Income from operations            3,840                9,802

The Company's earthmoving/construction market net sales were $39.9 million for the first quarter of 2009, as compared to $73.8 million in 2008. The major sales contraction in earthmoving/construction resulted from significantly reduced demand for earthmoving/construction machinery, a consequence of the worldwide recession and global economic crisis. A primary reason for the decline in this segment was the monumental reduction in the construction areas related to commercial, residential and infrastructure.

Gross profit in the earthmoving/construction market was $4.9 million for the first quarter of 2009, as compared to $11.9 million in 2008. Income from operations in the earthmoving/construction market was $3.8 million for the first quarter of 2009 versus $9.8 million in 2008. Gross profit and income from operations declined as a result of the major sales reduction.

                           TITAN INTERNATIONAL, INC.
                    Management's Discussion and Analysis of
                 Financial Condition and Results of Operations

Consumer Segment Results
Consumer segment results were as follows (amounts in thousands):
                                         Three months ended March 31,
                                           2009                2008
              Net sales                $       5,349       $       6,206
              Gross profit                       788               1,049
              Income from operations             637                 869

Consumer market net sales were $5.3 million for the first quarter of 2009, as compared to $6.2 million in 2008. The Goodyear farm tire acquisition agreement included an off-take/mixing agreement for certain product sales to Goodyear. The reduction in consumer market sales is related to lower sales to The Goodyear Tire & Rubber Company of approximately $0.7 million quarter over quarter.

Gross profit from the consumer market was $0.8 million for the first quarter of 2009, as compared to $1.0 million in 2008. Consumer market income from operations was $0.6 million for the first quarter of 2009, as compared to $0.9 million for 2008. Gross profit and income from operations declined proportionately with sales in the consumer market.