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 select 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 June 30, 2009, compared to 2008 (amounts in thousands):

                             Three months ended June 30,
                              2009                 2008
Net sales                $      206,983       $      269,114
Gross profit                     29,746               41,946
Income from operations           12,920               24,389
Net income                        5,910               13,306

Quarter: The Company recorded sales of $207.0 million for the second quarter of 2009, which were 23% lower than the second quarter 2008 sales of $269.1 million. The lower sales levels resulted from reduced demand for the Company's products across the board, a consequence of the worldwide recession and global economic crisis. These items had a larger negative impact on Titan's earthmoving/construction sales, which were approximately 45% lower, quarter over quarter.

The following operating results were primarily related to the lower sales levels. The Company's income from operations was $12.9 million for the second quarter of 2009, compared to $24.4 million in 2008. Net income was $5.9 million for the quarter, compared to $13.3 million in 2008. Basic earnings per share were $.17 in 2009, compared to $.39 in 2008.

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

The following table provides highlights for the six months ended June 30, 2009,
compared to 2008 (amounts in thousands):
                           Six months ended June 30,
                             2009               2008
Net sales                $     439,587       $  522,639
Gross profit                    59,809           74,290
Income from operations          26,997           40,509
Net income                      12,951           21,440

Year-to-date: The Company recorded sales of $439.6 million for the six months ended June 30, 2009, as compared to $522.6 million in 2008. The lower sales levels resulted from reduced demand for the Company's products across the board, a consequence of the worldwide recession and global economic crisis. These items had a larger negative impact on Titan's earthmoving/construction year-to-date sales, which were approximately 45% lower than the first six months of 2008.

The following operating results were primarily related to the lower sales levels. Titan's income from operations was $27.0 million for the six months ended June 30, 2009, as compared to $40.5 million in 2008. Net income was $13.0 million for the six months ended June 30, 2009, as compared to $21.4 million in 2008. Basic earnings per share were $.37 for the six months ended June 30, 2009, compared to $.62 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 75% of inventories and the last-in, first-out (LIFO) method for approximately 25% 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 June 30, 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."

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. Titan expects to contribute approximately $0.1 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.

RESULTS OF OPERATIONS
Highlights for the three and six months ended June 30, 2009, compared to
2008 (amounts in thousands):
                        Three months ended           Six months ended
                             June 30,                    June 30,
                        2009          2008          2009          2008
Net sales             $ 206,983     $ 269,114     $ 439,587     $ 522,639
Cost of sales           177,237       227,168       379,778       448,349
Gross profit             29,746        41,946        59,809        74,290
Gross profit margin        14.4 %        15.6 %        13.6 %        14.2 %

Net Sales
Quarter: Net sales for the quarter ended June 30, 2009, were $207.0 million, compared to $269.1 million in 2008. The lower sales levels were primarily the result of reduced demand for the Company's products, a consequence of the worldwide recession and global economic crisis.

Year-to-date: Net sales for the six months ended June 30, 2009, were $439.6 million, compared to 2008 net sales of $522.6 million. 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 and global economic crisis.

Cost of Sales and Gross Profit
Quarter: Cost of sales was $177.2 million and $227.2 million for the quarter ended June 30, 2009 and 2008, respectively. The cost of sales decreased as a result of the lower sales levels.

Gross profit for the second quarter of 2009 was $29.7 million or 14.4% of net sales, compared to $41.9 million or 15.6% of net sales for the second quarter of 2008. The gross profit margin had a reduction of approximately 1% primarily as a consequence of reduced manufacturing efficiencies resulting from lower sales levels.

Year-to-date: Cost of sales was $379.8 million for the six months ended June 30, 2009, compared to $448.3 million in 2008. The cost of sales decreased as a result of the lower sales levels.

Gross profit for the six months ended June 30, 2009, was $59.8 million or 13.6% of net sales, compared to $74.3 million or 14.2% of net sales in 2008. The gross profit margin had a slight reduction of approximately ½% primarily as a consequence of reduced manufacturing efficiencies resulting from lower sales levels.

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

Administrative Expenses
Selling, general and administrative expenses were as follows (amounts in
thousands):
                                        Three months ended          Six months ended
                                             June 30,                   June 30,
                                         2009          2008         2009         2008
Selling, general and administrative   $   14,626     $ 15,289     $ 28,153     $ 29,366
Percentage of net sales                      7.1 %        5.7 %        6.4 %        5.6 %

Quarter: Selling, general and administrative (SG&A) expenses for the second quarter of 2009 were $14.6 million or 7.1% of net sales, compared to $15.3 million or 5.7% of net sales for 2008. The Company's second quarter 2009 SG&A expense was slightly lower than that of the previous year's quarter. However, when the SG&A expenses are expressed as a percentage of net sales, the percentage is higher due to the lower sales levels.

Year-to-date: Expenses for SG&A for the six months ended June 30, 2009, were $28.2 million or 6.4% of net sales, compared to $29.4 million or 5.6% of net sales in 2008. The Company continues to strive to achieve low administrative expenses. The Company's SG&A expense for the first half of 2009 was slightly lower than that of the previous year's first half.

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

The Company has a license agreement with The Goodyear Tire & Rubber Company to manufacture and sell certain off-highway tires in North America under the Goodyear name.

Quarter: Royalty expenses recorded were $2.2 million and $2.3 million for the quarter ended June 30, 2009 and 2008, respectively. As sales subject to the license agreement have not changed significantly, the Company's second quarter 2009 royalty expense has remained relatively consistent with that of the previous year's quarter.

Year-to-date: Year-to-date royalty expenses recorded were $4.7 million and $4.4 million for the six months ended June 30, 2009 and 2008, respectively. As sales subject to the license agreement have not changed significantly, the Company's royalty expense for the first half of 2009 has remained relatively consistent with that of the previous year's first half.

Income from Operations
Income from operations was as follows (amounts in thousands):
                            Three months ended          Six months ended
                                 June 30,                   June 30,
                             2009          2008         2009         2008
Income from operations    $   12,920     $ 24,389     $ 26,997     $ 40,509
Percentage of net sales          6.2 %        9.1 %        6.1 %        7.8 %

Quarter: Income from operations for the second quarter of 2009 was $12.9 million or 6.2% of net sales, compared to $24.4 million or 9.1% of net sales in 2008. The 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.

Year-to-date: Income from operations for the six months ended June 30, 2009, was $27.0 million or 6.1% of net sales, compared to $40.5 million or 7.8% of net sales in 2008. The 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):

Quarter: Interest expense was $3.9 million and $3.7 million for the quarter ended June 30, 2009 and 2008, respectively. The Company's second quarter 2009 interest expense has remained relatively consistent with that of the previous year's quarter.

Year-to-date: Year-to-date interest expense was $7.8 million and $7.7 million for the six months ended June 30, 2009 and 2008, respectively. The Company's interest expense for the first half of 2009 has remained relatively consistent with that of the previous year's first half.

Other Income
Other income was as follows (amounts in thousands):
Three months ended Six months ended June 30, June 30, 2009 2008 2009 2008 Other income $ 647 $ 1,497 $ 2,056 $ 2,917

Quarter: Other income was $0.6 million and $1.5 million for the quarter ended June 30, 2009 and 2008, respectively. Dividend income of zero and $1.2 million from the Titan Europe Plc investment was recorded in the second quarter of 2009 and 2008, respectively.

Year-to-date: Year-to-date other income was $2.1 million for 2009 as compared to $2.9 million in 2008. A gain on senior note repurchase of $1.4 million was included in other income for the six months ended June 30, 2009. Dividend income of zero and $1.2 million from the Titan Europe Plc investment was recorded in the six months ended June 30, 2009 and 2008, respectively. Interest income included in other income was $0.1 million and $0.9 million for the six months ended June 30, 2009 and 2008, respectively.

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

Quarter: The Company recorded income tax expense of $3.8 million for the quarter ended June 30, 2009, as compared to $8.9 million in 2008. The Company's effective income tax rate was 39% and 40% for the quarter ended June 30, 2009 and 2008, respectively.

Year-to-date: Income tax expense for the six months ended June 30, 2009 and 2008, was $8.3 million and $14.3 million, respectively. The Company's effective income tax rate was 39% and 40% for the six months ended June 30, 2009 and 2008, respectively.

Net Income
Net income was as follows (amounts in thousands):
Three months ended Six months ended June 30, June 30, 2009 2008 2009 2008 Net income $ 5,910 $ 13,306 $ 12,951 $ 21,440

Quarter: Net income for the quarter ended June 30, 2009, was $5.9 million, compared to $13.3 million in 2008. For the quarter ended June 30, 2009 and 2008, basic earnings per share were $.17 and $.39, respectively, and diluted earnings per share were $.17 and $.38, respectively. The Company's net income and earnings per share were lower due to the items previously discussed.

Year-to-date: Net income for the six months ended June 30, 2009 and 2008, was $13.0 million and $21.4 million, respectively. For the six months ended June 30, 2009 and 2008, basic and diluted earnings per share were $.37 and $.62, respectively. The Company's net income and earnings per share were lower due to the items previously discussed.

Agricultural Segment Results
Agricultural segment results were as follows (amounts in thousands):
                           Three months ended           Six months ended
                                June 30,                    June 30,
                           2009          2008          2009          2008
Net sales                $ 160,344     $ 185,615     $ 347,672     $ 359,101
Gross profit                24,002        25,388        48,922        45,081
Income from operations      19,220        22,010        39,305        38,453

Quarter: Net sales in the agricultural market were $160.3 million for the quarter ended June 30, 2009, as compared to $185.6 million in 2008. Sales of smaller agricultural product softened in the quarter, while sales of large agricultural product remained relatively strong.

Gross profit in the agricultural market was $24.0 million for the quarter ended June 30, 2009, as compared to $25.4 million in 2008. Income from operations in the agricultural market was $19.2 million for the quarter ended June 30, 2009, as compared to $22.0 million in 2008. The reduction in gross profit and income from operations in the agricultural market was primarily attributed to lower farm equipment sales.

Year-to-date: Net sales in the agricultural market were $347.7 million for the six months ended June 30, 2009, as compared to $359.1 million in 2008. The reduced agricultural segment sales were the result of softening sales of small agricultural product. However, agricultural sales were supported by continued high demand for large agricultural equipment.

Gross profit in the agricultural market was $48.9 million for the six months ended June 30, 2009, as compared to $45.1 million in 2008. Income from operations in the agricultural market was $39.3 million for the six months ended June 30, 2009, as compared to $38.5 million in 2008. The increase in gross profit and income from operations in the agricultural market was primarily attributed to the continued strong large farm equipment sales.

                           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           Six months ended
                                June 30,                    June 30,
                            2009          2008         2009         2008
Net sales                $   42,426     $ 76,471     $ 82,353     $ 150,304
Gross profit                  5,658       15,675       10,542        27,586
Income from operations        2,822       13,393        6,662        23,195

Quarter: The Company's earthmoving/construction market net sales were $42.4 million for the quarter ended June 30, 2009, as compared to $76.5 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. Also negatively impacting this segment was the large reduction in the construction areas related to commercial, residential and infrastructure.

Gross profit in the earthmoving/construction market was $5.7 million for the quarter ended June 30, 2009, as compared to $15.7 million in 2008. Income from operations in the earthmoving/construction market was $2.8 million for the quarter ended June 30, 2009, as compared to $13.4 million in 2008. Gross profit and income from operations declined as a result of the major sales reduction.

Year-to-date: The Company's earthmoving/construction market net sales were $82.4 million for the six months ended June 30, 2009, as compared to $150.3 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. Also negatively impacting this segment was the large reduction in the construction areas related to commercial, residential and infrastructure.

Gross profit in the earthmoving/construction market was $10.5 million for the six months ended June 30, 2009, as compared to $27.6 million in 2008. Income from operations in the earthmoving/construction market was $6.7 million for the six months ended June 30, 2009, as compared to $23.2 million in 2008. Gross profit and income from operations declined as a result of the major sales reduction.

Consumer Segment Results
Consumer segment results were as follows (amounts in thousands):
                           Three months ended          Six months ended
                                June 30,                   June 30,
                            2009          2008         2009         2008
. . .