[PART I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for Titan International, Inc [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Titan International's unaudited condensed consolidated financial statements and accompanying notes for Q2 and H1 2019 and 2018 [Condensed Consolidated Statements of Operations (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%28Unaudited%29) This section presents unaudited consolidated statements of operations for the three and six months ended June 30, 2019 and 2018 **Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $390,597 | $428,904 | $800,971 | $854,286 | | Cost of sales | $352,289 | $370,592 | $717,399 | $736,413 | | Gross profit | $38,308 | $58,312 | $83,572 | $117,873 | | (Loss) income from operations | $(2,430) | $18,964 | $1,706 | $38,346 | | Net (loss) income attributable to Titan | $(6,424) | $8,436 | $(4,446) | $26,083 | | Basic EPS | $(0.12) | $0.06 | $(0.10) | $0.32 | | Diluted EPS | $(0.12) | $0.06 | $(0.10) | $0.32 | - Net sales for Q2 2019 decreased by **8.9% YoY to $390.6 million**, and for the six months ended June 30, 2019, decreased by **6.2% YoY to $801.0 million**[8](index=8&type=chunk) - The company reported a **net loss of $6.7 million** for Q2 2019, compared to a **net income of $8.5 million** in Q2 2018. For the six months, **net loss was $5.7 million** in 2019, compared to **net income of $24.4 million** in 2018[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29%20%28Unaudited%29) This section presents the unaudited condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2019 and 2018 **Condensed Consolidated Statements of Comprehensive Income (Loss) (Amounts in thousands)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income | $(6,677) | $8,476 | $(5,670) | $24,444 | | Currency translation adjustment | $5,423 | $(38,338) | $1,044 | $(30,276) | | Comprehensive loss attributable to Titan | $(1,101) | $(26,987) | $(3,939) | $(1,034) | - Comprehensive loss attributable to Titan for Q2 2019 was **$(1.1) million**, a significant improvement from **$(27.0) million** in Q2 2018[10](index=10&type=chunk) - Currency translation adjustment showed a **gain of $5.4 million** in Q2 2019, reversing a **loss of $38.3 million** in Q2 2018[10](index=10&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited condensed consolidated balance sheets as of June 30, 2019, and December 31, 2018 **Condensed Consolidated Balance Sheets (Amounts in thousands, except share data)** | Metric | June 30, 2019 (Unaudited, Thousands) | December 31, 2018 (Thousands) | | :------------------------------------ | :------------------------ | :---------------- | | Total current assets | $786,213 | $779,481 | | Total assets | $1,269,528 | $1,251,256 | | Total current liabilities | $392,622 | $375,068 | | Total liabilities | $925,920 | $861,346 | | Redeemable noncontrolling interest | $55,517 | $119,813 | | Total equity | $288,091 | $270,097 | - Total assets increased to **$1,269.5 million** as of June 30, 2019, from **$1,251.3 million** at December 31, 2018[13](index=13&type=chunk) - Redeemable noncontrolling interest significantly decreased to **$55.5 million** from **$119.8 million**[13](index=13&type=chunk) [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20%28Unaudited%29) This section presents the unaudited condensed consolidated statements of changes in equity for the six months ended June 30, 2019 **Condensed Consolidated Statements of Changes in Equity (Amounts in thousands, except share data)** | Metric | Balance January 1, 2019 (Thousands) | Balance June 30, 2019 (Thousands) | | :------------------------------------ | :---------------------- | :-------------------- | | Total Titan shareholders' equity | $279,048 | $282,934 | | Noncontrolling interests | $(8,951) | $5,157 | | Total equity | $270,097 | $288,091 | - Titan shareholders' equity increased from **$279.0 million** at January 1, 2019, to **$282.9 million** at June 30, 2019[17](index=17&type=chunk)[18](index=18&type=chunk) - Redeemable noncontrolling interest activity included a reclassification of **$(49.9) million** and a payment of interest of **$(16.0) million**[17](index=17&type=chunk)[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) This section presents the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2019 and 2018 **Condensed Consolidated Statements of Cash Flows (Amounts in thousands)** | Metric | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | | Net cash used for operating activities | $(10,001) | $(29,927) | | Net cash used for investing activities | $(56,490) | $(17,532) | | Net cash provided by financing activities | $50,041 | $14,953 | | Net decrease in cash and cash equivalents | $(15,319) | $(37,079) | | Cash and cash equivalents, end of period | $66,366 | $106,491 | - Net cash used for operating activities was **$(10.0) million** for the six months ended June 30, 2019, an improvement from **$(29.9) million** in the prior year[21](index=21&type=chunk) - Net cash used for investing activities increased significantly to **$(56.5) million** in 2019 from **$(17.5) million** in 2018, primarily due to a **$41.0 million** payment related to redeemable noncontrolling interest[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining accounting policies and specific financial line items [1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the basis of presentation and significant accounting policies applied in the condensed consolidated financial statements - The Company adopted ASU No. 2016-02, "Leases (Topic 842)," on January 1, 2019, recognizing operating lease right-of-use assets and corresponding lease liabilities, with a net credit adjustment to retained earnings of **$0.6 million**[27](index=27&type=chunk) - ASU No. 2018-02 was adopted, resulting in a **$4.9 million** reclassification to decrease accumulated other comprehensive income and increase retained earnings as of January 1, 2019, due to stranded tax effects from the 2017 TCJA[28](index=28&type=chunk) - The Company early-adopted ASU No. 2018-15, capitalizing an aggregate of **$7.4 million** of implementation costs for cloud computing arrangements for the year ended December 31, 2018, previously expensed as selling, general and administration[33](index=33&type=chunk) [2. ACCOUNTS RECEIVABLE](index=13&type=section&id=2.%20ACCOUNTS%20RECEIVABLE) This section details the composition of accounts receivable and the allowance for doubtful accounts **Accounts Receivable (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :-------------------- | :------------ | :---------------- | | Accounts receivable | $275,508 | $245,236 | | Allowance for doubtful accounts | $(3,502) | $(3,404) | | Accounts receivable, net | $272,006 | $241,832 | - Accounts receivable, net, increased to **$272.0 million** at June 30, 2019, from **$241.8 million** at December 31, 2018[41](index=41&type=chunk) [3. INVENTORIES](index=14&type=section&id=3.%20INVENTORIES) This section provides a breakdown of inventory components, including raw material, work-in-process, and finished goods **Inventories (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :-------------------- | :------------ | :---------------- | | Raw material | $103,185 | $110,806 | | Work-in-process | $54,524 | $55,543 | | Finished goods | $227,659 | $229,386 | | Total inventories | $385,368 | $395,735 | - Total inventories decreased to **$385.4 million** at June 30, 2019, from **$395.7 million** at December 31, 2018[43](index=43&type=chunk) [4. PROPERTY, PLANT AND EQUIPMENT, NET](index=14&type=section&id=4.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) This section presents the net property, plant, and equipment, including total cost and accumulated depreciation **Property, Plant and Equipment, Net (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :------------------------------------ | :------------ | :---------------- | | Total at cost | $1,036,036 | $1,020,349 | | Less accumulated depreciation | $(660,039) | $(635,477) | | Property, plant and equipment, net | $375,997 | $384,872 | - Net property, plant and equipment decreased to **$376.0 million** at June 30, 2019, from **$384.9 million** at December 31, 2018[44](index=44&type=chunk) - Depreciation on property, plant and equipment for the six months ended June 30, 2019, totaled **$26.1 million**, down from **$28.3 million** in 2018[44](index=44&type=chunk) [5. INTANGIBLE ASSETS, NET](index=15&type=section&id=5.%20INTANGIBLE%20ASSETS,%20NET) This section details the net intangible assets, including total cost and accumulated amortization **Intangible Assets, Net (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :------------------------------------ | :------------ | :---------------- | | Total at cost | $24,083 | $24,323 | | Less accumulated amortization | $(13,287) | $(12,676) | | Net intangible assets | $10,796 | $11,647 | - Net amortizable intangible assets decreased to **$10.8 million** at June 30, 2019, from **$11.6 million** at December 31, 2018[47](index=47&type=chunk) - Amortization related to intangible assets for the six months ended June 30, 2019, totaled **$1.1 million**, down from **$1.3 million** in 2018[47](index=47&type=chunk) [6. WARRANTY](index=15&type=section&id=6.%20WARRANTY) This section outlines the changes in warranty liability, including provisions and payments made **Warranty Liability (Amounts in thousands)** | Metric | 2019 (Thousands) | 2018 (Thousands) | | :------------------------------------ | :------------ | :------------ | | Warranty liability, January 1 | $16,327 | $18,612 | | Provision for warranty liabilities | $1,722 | $4,213 | | Warranty payments made | $(2,987) | $(3,818) | | Warranty liability, June 30 | $15,062 | $19,007 | - Warranty liability decreased to **$15.1 million** at June 30, 2019, from **$16.3 million** at January 1, 2019[49](index=49&type=chunk) - Provision for warranty liabilities for the six months ended June 30, 2019, was **$1.7 million**, significantly lower than **$4.2 million** in 2018[49](index=49&type=chunk) [7. REVOLVING CREDIT FACILITY AND LONG-TERM DEBT](index=16&type=section&id=7.%20REVOLVING%20CREDIT%20FACILITY%20AND%20LONG-TERM%20DEBT) This section details the company's revolving credit facility and long-term debt obligations **Long-Term Debt (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :------------------------------------ | :------------ | :---------------- | | Total debt | $516,754 | $461,457 | | Total long-term debt | $445,388 | $409,572 | | Revolving credit facility borrowings | $41,000 | — | - Total debt increased to **$516.8 million** at June 30, 2019, from **$461.5 million** at December 31, 2018[51](index=51&type=chunk) - The company had **$41.0 million** in borrowings under its **$125 million** revolving credit facility at June 30, 2019, with **$57.3 million** available[55](index=55&type=chunk) [8. DERIVATIVE FINANCIAL INSTRUMENTS](index=17&type=section&id=8.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) This section describes the company's use of derivative financial instruments to manage foreign currency exchange rate volatility - The Company uses financial derivatives to mitigate its exposure to volatility in foreign currency exchange rates, which are not designated as hedging instruments[57](index=57&type=chunk) - Currency exchange gains related to these derivatives were **$0.1 million** for Q2 2019 and **$0.0 million** for the six months ended June 30, 2019, compared to **$0.4 million** and **$0.2 million** for the respective periods in 2018[57](index=57&type=chunk) [9. REDEEMABLE NONCONTROLLING INTEREST](index=17&type=section&id=9.%20REDEEMABLE%20NONCONTROLLING%20INTEREST) This section provides a reconciliation of the redeemable noncontrolling interest, including reclassifications and payments **Reconciliation of Redeemable Noncontrolling Interest (Amounts in thousands)** | Metric | 2019 (Thousands) | 2018 (Thousands) | | :------------------------------------ | :------------ | :------------ | | Balance at January 1 | $119,813 | $113,193 | | Reclassification as a result of Agreement regarding put option | $(49,883) | — | | Payment of interest on redeemable noncontrolling interest | $(16,000) | — | | Balance at June 30 | $55,517 | $117,546 | - The redeemable noncontrolling interest decreased significantly to **$55.5 million** at June 30, 2019, from **$119.8 million** at January 1, 2019, primarily due to a **$49.9 million** reclassification and a **$16.0 million** payment[65](index=65&type=chunk) - RDIF exercised its put option in November 2018, leading to a **$25 million** cash payment and an agreement to issue 4,032,259 shares of restricted Titan common stock (pending regulatory approval). OEP exercised its put option in January 2019, resulting in a **$16 million** payment during Q2 2019, with a subsequent payment of **$30.7 million** in July 2019 to fully satisfy the obligation[59](index=59&type=chunk)[60](index=60&type=chunk) [10. LEASES](index=18&type=section&id=10.%20LEASES) This section presents supplemental balance sheet information related to leases, following the adoption of ASC 842 **Supplemental Balance Sheet Information Related to Leases (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | | :------------------------------------ | :------------ | | Operating lease ROU assets | $24,422 | | Total operating lease liabilities | $24,613 | | Finance lease, net | $2,696 | | Total finance lease liabilities | $2,757 | - The Company adopted ASC 842 on January 1, 2019, recognizing operating lease ROU assets of **$24.4 million** and total operating lease liabilities of **$24.6 million** at June 30, 2019[69](index=69&type=chunk) - The weighted average remaining lease term for operating leases is **4.9 years**, and for finance leases is **3.6 years**[69](index=69&type=chunk) [11. EMPLOYEE BENEFIT PLANS](index=20&type=section&id=11.%20EMPLOYEE%20BENEFIT%20PLANS) This section details the components of net periodic pension cost and contributions to employee benefit plans **Components of Net Periodic Pension Cost (Amounts in thousands)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net periodic pension cost | $945 | $488 | $1,925 | $942 | - Net periodic pension cost for the six months ended June 30, 2019, was **$1.9 million**, an increase from **$0.9 million** in 2018[73](index=73&type=chunk) - The Company contributed **$1.2 million** to pension plans during the first six months of 2019 and expects to contribute an additional **$1.6 million** for the remainder of 2019[72](index=72&type=chunk) [12. VARIABLE INTEREST ENTITIES](index=20&type=section&id=12.%20VARIABLE%20INTEREST%20ENTITIES) This section provides information on the company's consolidated and non-consolidated variable interest entities (VIEs) **VIEs' Assets and Liabilities (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :------------------------------------ | :------------ | :---------------- | | Consolidated VIEs Total assets | $99,658 | $91,612 | | Consolidated VIEs Total liabilities | $47,941 | $42,599 | | Non-consolidated VIEs Maximum exposure to loss | $7,116 | $7,535 | - The Company consolidates three joint ventures and five other entities as primary beneficiary VIEs, with total assets of **$99.7 million** and liabilities of **$47.9 million** at June 30, 2019[79](index=79&type=chunk) - For non-consolidated VIEs, Titan's maximum exposure to loss was **$7.1 million** at June 30, 2019, down from **$7.5 million** at December 31, 2018[80](index=80&type=chunk) [13. ROYALTY EXPENSE](index=21&type=section&id=13.%20ROYALTY%20EXPENSE) This section presents the royalty expenses incurred for the three and six months ended June 30, 2019 and 2018 **Royalty Expense (Amounts in thousands)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Royalty expenses | $2,448 | $2,634 | $5,054 | $5,297 | - Royalty expenses were **$2.4 million** for Q2 2019 and **$5.1 million** for the six months ended June 30, 2019, slightly down from **$2.6 million** and **$5.3 million** for the comparable periods in 2018[81](index=81&type=chunk) [14. OTHER INCOME](index=22&type=section&id=14.%20OTHER%20INCOME) This section details the other income recognized for the three and six months ended June 30, 2019 and 2018 **Other Income (Amounts in thousands)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Other income | $2,069 | $2,477 | $3,065 | $10,227 | - Other income decreased to **$2.1 million** for Q2 2019 from **$2.5 million** in Q2 2018, primarily due to lower equity investment income[84](index=84&type=chunk) - For the six months ended June 30, 2019, other income was **$3.1 million**, a significant decrease from **$10.2 million** in 2018, mainly due to a non-recurring legal settlement in 2018 and lower equity investment income[84](index=84&type=chunk) [15. INCOME TAXES](index=22&type=section&id=15.%20INCOME%20TAXES) This section presents the income tax benefit or provision and effective tax rates for the periods presented **Income Taxes (Amounts in thousands)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | (Benefit) provision for income taxes | $(3,218) | $1,683 | $(1,303) | $897 | | Effective income tax rate | 33% | 17% | 19% | 4% | - The Company recorded an income tax **benefit of $3.2 million** for Q2 2019, compared to an **expense of $1.7 million** in Q2 2018[85](index=85&type=chunk) - The effective income tax rate for Q2 2019 was **33%**, up from **17%** in Q2 2018. For the six months, the rate was **19%** in 2019, up from **4%** in 2018[85](index=85&type=chunk) [16. EARNINGS PER SHARE](index=23&type=section&id=16.%20EARNINGS%20PER%20SHARE) This section provides details on net income (loss) applicable to common shareholders and basic and diluted earnings per share **Earnings Per Share (Amounts in thousands, except per share data)** | Metric | Three months ended June 30, 2019 (Thousands) | Three months ended June 30, 2018 (Thousands) | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income applicable to common shareholders | $(7,085) | $3,758 | $(5,883) | $19,062 | | Basic and diluted EPS | $(0.12) | $0.06 | $(0.10) | $0.32 | - Basic and diluted EPS for Q2 2019 was **$(0.12)**, compared to **$0.06** in Q2 2018[91](index=91&type=chunk) - For the six months ended June 30, 2019, basic and diluted EPS was **$(0.10)**, compared to **$0.32** in 2018[91](index=91&type=chunk) [17. LITIGATION](index=24&type=section&id=17.%20LITIGATION) This section outlines the company's involvement in routine legal proceedings, including environmental litigation - The Company is involved in routine legal proceedings, including environmental litigation concerning CERCLA violations by Titan Tire and Dico, Inc[94](index=94&type=chunk)[96](index=96&type=chunk) - A contingent liability of **$6.5 million** was accrued as of September 30, 2017, for response costs and punitive damages, which remains outstanding as of June 30, 2019[98](index=98&type=chunk) - The U.S. Court of Appeals affirmed the District Court's order in April 2019, and a petition for rehearing is pending. A **$6.0 million** supersedeas bond has been obtained to stay enforcement[99](index=99&type=chunk) [18. SEGMENT INFORMATION](index=25&type=section&id=18.%20SEGMENT%20INFORMATION) This section provides financial information broken down by the company's operating segments: Agricultural, Earthmoving/Construction, and Consumer **Segment Net Sales (Amounts in thousands)** | Segment | Q2 2019 (Thousands) | Q2 2018 (Thousands) | 6M 2019 (Thousands) | 6M 2018 (Thousands) | | :------------------------------- | :----------- | :----------- | :----------- | :----------- | | Agricultural | $164,284 | $186,870 | $356,014 | $381,037 | | Earthmoving/construction | $184,782 | $198,963 | $361,527 | $387,696 | | Consumer | $41,531 | $43,071 | $83,430 | $85,553 | | Total Net Sales | $390,597 | $428,904 | $800,971 | $854,286 | **Segment Gross Profit (Amounts in thousands)** | Segment | Q2 2019 (Thousands) | Q2 2018 (Thousands) | 6M 2019 (Thousands) | 6M 2018 (Thousands) | | :---------------------------------- | :----------- | :----------- | :----------- | :----------- | | Agricultural | $14,247 | $27,270 | $36,372 | $57,231 | | Earthmoving/construction | $19,701 | $24,260 | $37,871 | $46,722 | | Consumer | $4,360 | $6,782 | $9,329 | $13,920 | | Total Gross Profit | $38,308 | $58,312 | $83,572 | $117,873 | - Net sales decreased across all segments for both the three and six months ended June 30, 2019, compared to 2018[103](index=103&type=chunk) - Agricultural segment net sales decreased by **12.1%** in Q2 2019 and **6.6%** for the six months, while gross profit decreased by **47.8%** and **36.4%** respectively[103](index=103&type=chunk) [19. FAIR VALUE MEASUREMENTS](index=26&type=section&id=19.%20FAIR%20VALUE%20MEASUREMENTS) This section discloses assets measured at fair value on a recurring basis, primarily derivative financial instruments **Assets Measured at Fair Value on a Recurring Basis (Amounts in thousands)** | Metric | June 30, 2019 (Thousands) | December 31, 2018 (Thousands) | | :------------------------------------ | :------------ | :---------------- | | Derivative financial instruments asset | $0 | $902 | - The Company had no derivative financial instruments asset measured at fair value as of June 30, 2019, compared to **$0.9 million** at December 31, 2018, which was classified as Level 2[106](index=106&type=chunk) [20. RELATED PARTY TRANSACTIONS](index=26&type=section&id=20.%20RELATED%20PARTY%20TRANSACTIONS) This section details transactions with related parties, including sales and payments related to put options **Related Party Transactions (Amounts in millions)** | Metric | Q2 2019 (Millions) | Q2 2018 (Millions) | 6M 2019 (Millions) | 6M 2018 (Millions) | | :------------------------------------ | :------ | :------ | :------ | :------ | | Sales to related parties | $0.2 | $0.3 | $0.5 | $0.6 | | Sales commissions paid | $0.3 | $0.5 | $0.8 | $1.0 | - Sales of Titan products to related parties were **$0.2 million** for Q2 2019 and **$0.5 million** for the six months, down from **$0.3 million** and **$0.6 million** respectively in 2018[107](index=107&type=chunk) - The Company made a **$16 million** payment to OEP during Q2 2019 related to the Voltyre-Prom put option, with a subsequent **$30.7 million** payment in July 2019[108](index=108&type=chunk) [21. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=27&type=section&id=21.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) This section presents the changes in accumulated other comprehensive loss, including currency translation adjustments **Accumulated Other Comprehensive Loss (Amounts in thousands)** | Metric | Balance at January 1, 2019 (Thousands) | Balance at June 30, 2019 (Thousands) | | :------------------------------------ | :------------------------- | :----------------------- | | Accumulated other comprehensive loss | $(203,571) | $(207,996) | - Accumulated other comprehensive loss increased to **$(208.0) million** at June 30, 2019, from **$(203.6) million** at January 1, 2019[111](index=111&type=chunk) - This change includes a currency translation adjustment of **$4.8 million** for Q2 2019 and a reclassification of **$(4.9) million** to retained earnings due to ASU 2018-02 adoption[111](index=111&type=chunk) [22. SUBSIDIARY GUARANTOR FINANCIAL INFORMATION](index=27&type=section&id=22.%20SUBSIDIARY%20GUARANTOR%20FINANCIAL%20INFORMATION) This section provides condensed consolidating financial statements for the parent company and its guarantor and non-guarantor subsidiaries - The section provides condensed consolidating financial statements for the parent company, guarantor subsidiaries, and non-guarantor subsidiaries, reflecting the full and unconditional guarantees of the senior secured notes by certain wholly-owned subsidiaries[112](index=112&type=chunk) **Net (Loss) Income by Entity (Amounts in thousands)** | Entity | Three months ended June 30, 2019 (Thousands) | Six months ended June 30, 2019 (Thousands) | | :-------------------------------------- | :------------------------------- | :----------------------------- | | Titan Intl., Inc. (Parent) | $(6,677) | $(5,670) | | Guarantor Subsidiaries | $(1,533) | $3,744 | | Non Guarantor Subsidiaries | $(4,153) | $2,168 | | Consolidated | $(6,424) | $(4,446) | [23. SUBSEQUENT EVENTS](index=34&type=section&id=23.%20SUBSEQUENT%20EVENTS) This section discloses significant events that occurred after the balance sheet date, including a put option settlement - On July 30, 2019, Titan Purchaser entered into an agreement with OEP subsidiaries to fully satisfy the settlement put option for Voltyre-Prom[133](index=133&type=chunk) - A payment of **$30.7 million** in cash was made on July 31, 2019, in addition to the **$16 million** paid in Q2 2019[133](index=133&type=chunk) - Following the closing, OEP ceased ownership, and Titan Purchaser and RDIF owned **64.3%** and **35.7%** of Voltyre-Prom, respectively[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Titan's financial condition, operational results, liquidity, and outlook, covering market conditions and segment performance [FORWARD-LOOKING STATEMENTS](index=35&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements subject to various risks and uncertainties - The report contains forward-looking statements regarding financial performance, market trends, capital expenditures, cost control, new products, and acquisition/divestiture opportunities[138](index=138&type=chunk)[140](index=140&type=chunk) - These statements are subject to risks and uncertainties, including economic recession, market changes, labor relations, legal proceedings, regulatory compliance, raw material availability, and geopolitical factors[139](index=139&type=chunk)[140](index=140&type=chunk) [OVERVIEW](index=36&type=section&id=OVERVIEW) This section provides an overview of Titan International, Inc. as a global manufacturer of off-highway wheels, tires, and undercarriage products - Titan International, Inc. is a global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products for agricultural, earthmoving/construction, and consumer markets[143](index=143&type=chunk) - The Company serves OEMs and aftermarket customers, producing products under brands like Goodyear Farm Tire and Titan Tire[143](index=143&type=chunk) - Key customers include global leaders such as AGCO Corporation, Caterpillar Inc., CNH Global N.V., and Deere & Company[148](index=148&type=chunk) [MARKET CONDITIONS AND OUTLOOK](index=37&type=section&id=MARKET%20CONDITIONS%20AND%20OUTLOOK) This section discusses current market conditions and the outlook for the agricultural, earthmoving/construction, and consumer segments [AGRICULTURAL MARKET OUTLOOK](index=37&type=section&id=AGRICULTURAL%20MARKET%20OUTLOOK) This section provides an outlook on the agricultural market, noting commodity prices, farmer caution, and OEM forecasts - Agricultural commodity prices have recently rebounded somewhat, but remain low as a result of ongoing tariffs and trade concerns[149](index=149&type=chunk) - North American farmers are becoming more cautious about large equipment purchases due to a delayed planting season caused by extraordinarily bad weather[149](index=149&type=chunk) - Most major OEMs are forecasting flat to modest growth (**0% to 5%**) in agricultural equipment sales during 2019 within most regions, while after-market spending has been reduced[149](index=149&type=chunk) [EARTHMOVING/CONSTRUCTION MARKET OUTLOOK](index=37&type=section&id=EARTHMOVING/CONSTRUCTION%20MARKET%20OUTLOOK) This section provides an outlook on the earthmoving/construction market, noting moderation after a strong start and steady demand for larger equipment - The earthmoving/construction market had a strong start in early 2019, but the second quarter experienced some moderation due to global economic volatility[150](index=150&type=chunk) - Demand for larger construction equipment and mining industry equipment continues to steadily increase within certain regions in 2019[150](index=150&type=chunk) - Demand for Titan's products in this market is anticipated to be steady and modestly improve throughout the remainder of 2019[150](index=150&type=chunk) [CONSUMER MARKET OUTLOOK](index=37&type=section&id=CONSUMER%20MARKET%20OUTLOOK) This section provides an outlook on the consumer market, including product categories and expected growth - The consumer market consists of bias truck tires in Latin America, light truck tires in Russia, and select products for ATVs, turf, and golf cart applications[151](index=151&type=chunk) - Overall, the Company expects flat to modest growth within this market during 2019[151](index=151&type=chunk) [RESULTS OF OPERATIONS](index=37&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including net sales, gross profit, and operating expenses [Net Sales](index=38&type=section&id=Net%20Sales) This section analyzes the changes in net sales for the three and six months ended June 30, 2019 - Net sales for Q2 2019 decreased by **8.9% to $390.6 million**, driven by sales decreases in all segments, lower volume (**4.3%**), unfavorable price/mix (**0.8%**), and unfavorable currency translation (**3.8%**)[154](index=154&type=chunk) - Net sales for the six months ended June 30, 2019, decreased by **6.2% to $801.0 million**, due to lower volume (**3.9%**) and unfavorable currency translation (**4.8%**), partially offset by favorable price/mix (**2.5%**)[155](index=155&type=chunk) [Gross Profit](index=38&type=section&id=Gross%20Profit) This section analyzes the changes in gross profit and gross margin for the three and six months ended June 30, 2019 - Gross profit for Q2 2019 decreased by **34.3% to $38.3 million** (**9.8%** of net sales) from **$58.3 million** (**13.6%** of net sales) in Q2 2018[156](index=156&type=chunk) - The decrease in gross profit was driven by lower sales volume across most geographic regions, effects of currency devaluation (especially in Europe, Latin America, and Russia), and impacts from higher production costs on elevated inventory in the North American wheel business[156](index=156&type=chunk) - For the six months, gross profit decreased by **29.1% to $83.6 million** (**10.4%** of net sales) from **$117.9 million** (**13.8%** of net sales) in 2018, due to lower volume and unfavorable currency impact[157](index=157&type=chunk) [Selling, General and Administrative Expenses](index=38&type=section&id=Selling,%20General%20and%20Administrative%20Expenses) This section analyzes the changes in selling, general, and administrative expenses for the three and six months ended June 30, 2019 - SG&A expenses for Q2 2019 increased by **5.3% to $35.7 million** (**9.2%** of net sales) from **$34.0 million** (**7.9%** of net sales) in Q2 2018, primarily related to investments in information technology in North America and an increase in legal fees[158](index=158&type=chunk) - For the six months, SG&A increased by **4.4% to $71.7 million** (**8.9%** of net sales) from **$68.6 million** (**8.0%** of net sales) in 2018, due to similar factors[158](index=158&type=chunk) [Research and Development Expenses](index=38&type=section&id=Research%20and%20Development%20Expenses) This section analyzes the changes in research and development expenses for the three and six months ended June 30, 2019 - R&D expenses for Q2 2019 decreased by **7.6% to $2.5 million** (**0.7%** of net sales) from **$2.8 million** (**0.6%** of net sales) in Q2 2018[159](index=159&type=chunk) - For the six months, R&D expenses decreased by **8.3% to $5.2 million** (**0.6%** of net sales) from **$5.6 million** (**0.7%** of net sales) in 2018[159](index=159&type=chunk) [Royalty Expense](index=38&type=section&id=Royalty%20Expense) This section analyzes the royalty expenses incurred for the three and six months ended June 30, 2019 - Royalty expenses for Q2 2019 were **$2.4 million** (**0.6%** of net sales), down from **$2.6 million** (**0.6%** of net sales) in Q2 2018[161](index=161&type=chunk) - For the six months, royalty expenses were **$5.1 million** (**0.6%** of net sales), down from **$5.3 million** (**0.6%** of net sales) in 2018[161](index=161&type=chunk) [Income (Loss) from Operations](index=39&type=section&id=Income%20%28Loss%29%20from%20Operations) This section analyzes the income or loss from operations for the three and six months ended June 30, 2019 - Loss from operations for Q2 2019 was **$(2.4) million**, a significant decline from **income of $19.0 million** for Q2 2018[163](index=163&type=chunk) - Income from operations for the six months ended June 30, 2019, was **$1.7 million**, down from **$38.3 million** for the six months ended June 30, 2018[163](index=163&type=chunk) [OTHER PROFIT/LOSS ITEMS](index=39&type=section&id=OTHER%20PROFIT/LOSS%20ITEMS) This section analyzes other profit and loss items, including interest expense, foreign exchange, other income, and income taxes [Interest Expense](index=39&type=section&id=Interest%20Expense) This section analyzes the changes in interest expense for the three and six months ended June 30, 2019 - Interest expense increased to **$8.3 million** for Q2 2019 from **$7.7 million** in Q2 2018, and to **$16.2 million** for the six months from **$15.2 million** in 2018[164](index=164&type=chunk) - The increase was primarily due to increased borrowings under Titan's revolving credit facility and increases in borrowing rates[164](index=164&type=chunk) [Foreign Exchange Gain (Loss)](index=39&type=section&id=Foreign%20Exchange%20Gain%20%28Loss%29) This section analyzes the foreign exchange gains or losses for the three and six months ended June 30, 2019 - Foreign exchange loss was **$(1.2) million** for Q2 2019, an improvement from a **loss of $(3.6) million** for Q2 2018[165](index=165&type=chunk) - For the six months, a foreign exchange **gain of $4.5 million** was recorded in 2019, reversing a **loss of $(8.0) million** in 2018[165](index=165&type=chunk) [Other Income](index=39&type=section&id=Other%20Income) This section analyzes the changes in other income for the three and six months ended June 30, 2019 - Other income decreased to **$2.1 million** for Q2 2019 from **$2.5 million** in Q2 2018, mainly due to lower equity investment income[166](index=166&type=chunk) - For the six months, other income decreased significantly to **$3.1 million** from **$10.2 million** in 2018, primarily due to a non-recurring legal settlement in 2018 and lower equity investment income[167](index=167&type=chunk) [Provision (Benefit) for Income Taxes](index=39&type=section&id=Provision%20%28Benefit%29%20for%20Income%20Taxes) This section analyzes the income tax provision or benefit and effective tax rates for the periods presented - The Company recorded an income tax **benefit of $3.2 million** for Q2 2019 (effective rate **33%**) compared to an **expense of $1.7 million** (effective rate **17%**) in Q2 2018[168](index=168&type=chunk) - For the six months, an income tax **benefit of $1.3 million** (effective rate **19%**) was recorded in 2019 compared to an **expense of $0.9 million** (effective rate **4%**) in 2018[168](index=168&type=chunk) - Tax rate differences are attributed to valuation allowances on deferred tax assets from projected losses, reduction of unrecognized tax positions, non-deductible royalty expenses, and statutory income adjustments in foreign jurisdictions[169](index=169&type=chunk) [Net Income (Loss) and Earnings (Loss) per Share](index=39&type=section&id=Net%20Income%20%28Loss%29%20and%20Earnings%20%28Loss%29%20per%20Share) This section analyzes the net income or loss and basic and diluted earnings per share for the periods presented - Net loss for Q2 2019 was **$(6.7) million**, compared to **net income of $8.5 million** in Q2 2018. Basic and diluted EPS was **$(0.12)** for Q2 2019, down from **$0.06** in Q2 2018[170](index=170&type=chunk) - Net loss for the six months ended June 30, 2019, was **$(5.7) million**, compared to **net income of $24.4 million** in 2018. Basic and diluted EPS was **$(0.10)** for the six months, down from **$0.32** in 2018[171](index=171&type=chunk) [SEGMENT INFORMATION](index=40&type=section&id=SEGMENT%20INFORMATION) This section provides a detailed analysis of the financial results for each of the company's operating segments [Agricultural Segment Results](index=40&type=section&id=Agricultural%20Segment%20Results) This section analyzes the net sales, gross profit, and income from operations for the Agricultural segment **Agricultural Segment Results (Amounts in thousands)** | Metric | Q2 2019 (Thousands) | Q2 2018 (Thousands) | 6M 2019 (Thousands) | 6M 2018 (Thousands) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Net sales | $164,284 | $186,870 | $356,014 | $381,037 | | Gross profit | $14,247 | $27,270 | $36,372 | $57,231 | | Income from operations | $4,365 | $19,002 | $18,293 | $40,323 | - Net sales decreased by **12.1% to $164.3 million** in Q2 2019 (**6.5%** volume, **3.6%** currency, **2.0%** price/mix) and by **6.6% to $356.0 million** for the six months (**4.4%** volume, **4.7%** currency, offset by **2.5%** price/mix)[176](index=176&type=chunk)[178](index=178&type=chunk) - Gross profit decreased by **47.8% to $14.2 million** in Q2 2019 and by **36.4% to $36.4 million** for the six months, primarily due to lower sales volume, adverse weather, and unfavorable currency translation[177](index=177&type=chunk)[179](index=179&type=chunk) [Earthmoving/Construction Segment Results](index=41&type=section&id=Earthmoving/Construction%20Segment%20Results) This section analyzes the net sales, gross profit, and income from operations for the Earthmoving/Construction segment **Earthmoving/Construction Segment Results (Amounts in thousands)** | Metric | Q2 2019 (Thousands) | Q2 2018 (Thousands) | 6M 2019 (Thousands) | 6M 2018 (Thousands) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Net sales | $184,782 | $198,963 | $361,527 | $387,696 | | Gross profit | $19,701 | $24,260 | $37,871 | $46,722 | | Income from operations | $5,697 | $11,575 | $11,225 | $21,528 | - Net sales decreased by **7.1% to $184.8 million** in Q2 2019 (**3.0%** volume, **4.0%** currency, **0.1%** price mix) and by **6.7% to $361.5 million** for the six months (**3.5%** volume, **4.7%** currency, offset by **1.5%** price/mix)[180](index=180&type=chunk)[183](index=183&type=chunk) - Gross profit decreased by **18.8% to $19.7 million** in Q2 2019 and by **18.9% to $37.9 million** for the six months, mainly due to lower sales volume, production inefficiencies, and unfavorable foreign currency translation[181](index=181&type=chunk)[184](index=184&type=chunk) [Consumer Segment Results](index=42&type=section&id=Consumer%20Segment%20Results) This section analyzes the net sales, gross profit, and income from operations for the Consumer segment **Consumer Segment Results (Amounts in thousands)** | Metric | Q2 2019 (Thousands) | Q2 2018 (Thousands) | 6M 2019 (Thousands) | 6M 2018 (Thousands) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Net sales | $41,531 | $43,071 | $83,430 | $85,553 | | Gross profit | $4,360 | $6,782 | $9,329 | $13,920 | | Income from operations | $1,228 | $3,651 | $3,349 | $7,598 | - Net sales decreased by **3.6% to $41.5 million** in Q2 2019 (**4.2%** currency, **1.0%** volume, offset by **1.6%** price/mix) and by **2.5% to $83.4 million** for the six months (**6.1%** currency, **3.0%** volume, offset by **6.6%** price/mix)[185](index=185&type=chunk)[187](index=187&type=chunk) - Gross profit decreased by **35.7% to $4.4 million** in Q2 2019 and by **33.0% to $9.3 million** for the six months, primarily due to the mix of products sold[186](index=186&type=chunk)[188](index=188&type=chunk) [Corporate & Unallocated Expenses](index=42&type=section&id=Corporate%20%26%20Unallocated%20Expenses) This section details corporate and unallocated expenses for the three and six months ended June 30, 2019 and 2018 - Corporate expenses were **$13.7 million** for Q2 2019 and **$31.2 million** for the six months ended June 30, 2019, compared to **$15.3 million** and **$31.1 million** for the comparable periods in 2018, respectively[189](index=189&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=43&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's cash flows, debt, and overall liquidity position and outlook [Cash Flows](index=43&type=section&id=Cash%20Flows) This section provides an overview of the company's cash and cash equivalents as of June 30, 2019 - As of June 30, 2019, the Company had **$66.4 million** of cash, a decrease of **$15.3 million** from December 31, 2018[192](index=192&type=chunk) [Operating Cash Flows](index=43&type=section&id=Operating%20Cash%20Flows) This section analyzes the net cash flows from operating activities for the six months ended June 30, 2019 and 2018 **Summary of Cash Flows from Operating Activities (Amounts in thousands)** | Metric | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | Change (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Net (loss) income | $(5,670) | $24,444 | $(30,114) | | Accounts receivable | $(27,193) | $(70,633) | $43,440 | | Inventories | $14,258 | $(47,612) | $61,870 | | Cash used for operating activities | $(10,001) | $(29,927) | $19,926 | - Net cash used for operating activities was **$(10.0) million** for the six months ended June 30, 2019, an improvement of **$19.9 million** compared to **$(29.9) million** in 2018[193](index=193&type=chunk) - This improvement was driven by increased cash flows from inventories (**$61.9 million**) and accounts receivable (**$43.4 million**), despite a decrease in net income[193](index=193&type=chunk) [Investing Cash Flows](index=44&type=section&id=Investing%20Cash%20Flows) This section analyzes the net cash flows from investing activities for the six months ended June 30, 2019 and 2018 **Summary of Cash Flows from Investing Activities (Amounts in thousands)** | Metric | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | Change (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Capital expenditures | $(16,725) | $(18,416) | $1,691 | | Payments related to redeemable noncontrolling interest | $(41,000) | — | $(41,000) | | Cash used for investing activities | $(56,490) | $(17,532) | $(38,958) | - Net cash used for investing activities increased to **$(56.5) million** for the six months ended June 30, 2019, from **$(17.5) million** in 2018, primarily due to a **$41.0 million** payment related to redeemable noncontrolling interest[196](index=196&type=chunk) - Capital expenditures decreased slightly to **$16.7 million** in 2019 from **$18.4 million** in 2018[196](index=196&type=chunk) [Financing Cash Flows](index=44&type=section&id=Financing%20Cash%20Flows) This section analyzes the net cash flows from financing activities for the six months ended June 30, 2019 and 2018 **Summary of Cash Flows from Financing Activities (Amounts in thousands)** | Metric | Six months ended June 30, 2019 (Thousands) | Six months ended June 30, 2018 (Thousands) | Change (Thousands) | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------- | | Proceeds from borrowings | $92,723 | $40,078 | $52,645 | | Payment on debt | $(42,083) | $(24,527) | $(17,556) | | Cash provided by financing activities | $50,041 | $14,953 | $35,088 | - Net cash provided by financing activities increased to **$50.0 million** for the six months ended June 30, 2019, from **$15.0 million** in 2018, driven by **$92.7 million** in proceeds from borrowings, partially offset by **$42.1 million** in debt payments[197](index=197&type=chunk) [Debt Restrictions](index=44&type=section&id=Debt%20Restrictions) This section outlines the various restrictions and covenants associated with the company's credit facility and senior secured notes - The Company's credit facility and senior secured notes indenture contain various restrictions, including a minimum fixed charge coverage ratio (**1.0 to 1.0**) if availability falls below **10%** of total commitment (**$12.5 million**)[198](index=198&type=chunk)[200](index=200&type=chunk) - Other restrictions include limits on dividends, stock repurchases, additional borrowings, investments, dispositions of assets, and guarantees of indebtedness[200](index=200&type=chunk) [Liquidity Outlook](index=45&type=section&id=Liquidity%20Outlook) This section provides the company's outlook on its liquidity, including available cash, credit facilities, and future capital needs - As of June 30, 2019, the Company had **$66.4 million** in cash and cash equivalents, with **$57.3 million** available under its **$125 million** revolving credit facility[202](index=202&type=chunk) - Total capital expenditures for 2019 are forecasted at approximately **$40 million**, and cash payments for interest are forecasted at **$20 million** for the latter half of 2019[203](index=203&type=chunk) - The Company expects current cash, internal cash flows from operations, and utilization of remaining available borrowings to provide sufficient liquidity for working capital needs, debt maturities, and capital expenditures[207](index=207&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=45&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section states that there were no material changes to critical accounting estimates since the 2018 Form 10-K filing - There were no material changes in the Company's Critical Accounting Estimates since the filing of the 2018 Form 10-K[208](index=208&type=chunk) - The preparation of consolidated financial statements requires management to make estimates, assumptions, and judgments that affect reported amounts, and actual results may differ[208](index=208&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the disclosures about market risk provided in the Company's 2018 Form 10-K, indicating no material changes since that filing - There have been no material changes in quantitative and qualitative disclosures about market risk since the 2018 Form 10-K[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) This section evaluates the effectiveness of the company's disclosure controls and internal control over financial reporting, noting inherent limitations [Evaluation of Disclosure Controls and Procedures](index=46&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section concludes on the effectiveness of the company's disclosure controls and procedures as of June 30, 2019 - As of June 30, 2019, management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective[212](index=212&type=chunk) - These controls provide reasonable assurance that information required to be disclosed is accurately recorded, processed, summarized, and reported in a timely manner[212](index=212&type=chunk) [Changes in Internal Controls](index=46&type=section&id=Changes%20in%20Internal%20Controls) This section states that there were no material changes in internal control over financial reporting during Q2 2019 - There were no changes in internal control over financial reporting that occurred during the second quarter of fiscal 2019 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[213](index=213&type=chunk) [Inherent Limitations on the Effectiveness of Controls](index=46&type=section&id=Inherent%20Limitations%20on%20the%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of control systems, which may not prevent or detect all misstatements or fraud - The Company's disclosure controls and procedures or internal control over financial reporting have inherent limitations and may not prevent or detect all misstatements or fraud[214](index=214&type=chunk) - Control systems provide only reasonable, not absolute, assurance, and can be circumvented by individual acts, collusion of two or more people, or by management override of the controls[214](index=214&type=chunk)[215](index=215&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=Part%20II.%20Other%20Information) This section covers other information, including legal proceedings, risk factors, exhibits, and signatures [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) This section notes the company's routine legal proceedings and claims, with further details provided in Note 17 - The Company is subject, from time to time, to certain legal proceedings and claims arising out of the normal course of its business, which cover a wide range of matters, including environmental issues, product liability, contracts, and labor and employment matters[218](index=218&type=chunk) - Further discussion on legal proceedings is provided in Note 17 - Litigation in Part I, Item 1, Notes to Condensed Consolidated Financial Statements[218](index=218&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the Company's 2018 Form 10-K - There have been no material changes from the risk factors disclosed in Item 1A. Risk Factors to the 2018 Form 10-K[219](index=219&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications, XBRL taxonomy documents, and amendments to agreements - Includes certifications of the Principal Executive Officer (**31.1**) and Principal Financial Officer (**31.2**) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, and a certification pursuant to Section 906 (**32**)[222](index=222&type=chunk) - Lists XBRL Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents (**101.SCH**, **101.CAL**, **101.DEF**, **101.LAB**, and **101.PRE**)[222](index=222&type=chunk) - References a Second Amendment to Credit and Security Agreement dated May 17, 2019[222](index=222&type=chunk) [Signatures](index=48&type=section&id=Signatures) This section contains the signatures of the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer, certifying the filing of the report - The report was signed on July 31, 2019, by Paul G. Reitz (President and Chief Executive Officer) and David A. Martin (SVP and Chief Financial Officer)[226](index=226&type=chunk)

Financial Data and Key Metrics Changes - Net sales for Q1 2019 were $410 million, a decline of 3.5% year-over-year, but up 13% from Q4 2018 [27] - Gross profit for Q1 was $45.3 million, down from $59.6 million in Q1 2018, with gross margin at 11% compared to 14% last year [30] - The impact of currency devaluation on gross profit was approximately $2.5 million versus the prior year [30] Business Line Data and Key Metrics Changes - Agricultural segment net sales were $192 million, down 1.3% year-over-year, but would have been up 4% without negative currency impact [36] - Earthmoving/Construction segment sales decreased by 6.4% to $177 million, with volume down by 4% [39] - Consumer segment net sales were roughly $42 million, decreasing slightly year-over-year, with gross profit down $7 million from a year ago [42] Market Data and Key Metrics Changes - North American sales were relatively flat year-over-year, with challenges noted in Russia, Europe, and Latin America [29] - Russian agricultural sales were down 26% due to market challenges, while European agricultural sales lagged by 22% [37] - Latin American business faced headwinds, particularly in Argentina and Colombia, impacting export sales from Brazil [33] Company Strategy and Development Direction - The company is focusing on improving its product mix in Russia from 95% aftermarket to more OEM sales [22] - The management team is evaluating strategic alternatives for ITM, the undercarriage business, with potential for a public listing [66][70] - The company is implementing an 80-20 program for North American tire to stabilize sales in a tough market [20] Management Comments on Operating Environment and Future Outlook - Management noted that weather conditions and trade disputes have negatively impacted farmer sentiment and spending [14][24] - Despite a challenging Q1, management believes the fundamentals have not shifted significantly, maintaining 2019 guidance [24] - The company expects to see improved margins and profitability as market conditions stabilize and production ramps up [85] Other Important Information - The company experienced a negative foreign currency impact of $25 million in sales and approximately $2.5 million in lost gross margin [16] - Capital expenditures for Q1 were $9.5 million, in line with expectations for the year [54] - The company has sufficient liquidity and plans to upsize its credit facility to $125 million [63] Q&A Session Summary Question: What is the cash requirement for daily operations? - Management indicated that the company can operate effectively with cash levels between $60 million to $80 million [73] Question: Will the company be cash positive this year? - Management expects to achieve positive cash flow by the end of the year, though not necessarily in the first half [74] Question: What is the status of the $25 million share repurchase program? - The Board will consider stock price and internal cash flow when deciding on the program, which is intended to be managed over time [96] Question: What were the surprises in Q1 results compared to guidance? - Management noted unexpected margin hits and weaker performance in January and February, but sees opportunities for recovery [100] Question: What factors will drive better margins moving forward? - Management expects stronger production in North American tire and favorable raw material prices to contribute to improved margins [106]

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: March 31, 2019 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) Delaware 36-3228472 (State of Incorporation) (I.R.S. Employer Identification No.) 2701 Spru ...

CTITAN Sidoti Presentation March 28, 2019 Safe Harbor Statement SAFE HARBOR STATEMENT: The accompanying material includes forward-looking comments and information concerning the company's expectations and objectives for the future. Readers of this material should understand that these forward looking statements are based on the Company's expectations and subject to a number of risks and uncertainties, certain of which are beyond the Company's control. Actual results may differ materially from those projecte ...

Titan International Inc. (NYSE:TWI) Q4 2018 Results Earnings Conference Call March 7, 2019 9:00 AM ET Company Participants Todd Shoot - Treasurer and VP, IR Paul Reitz - President and CEO David Martin - SVP and CFO Conference Call Participants Steve Volkmann - Jefferies Joe Mondillo - Sidoti & Company Komal Patel - Goldman Sachs Justine Ho - Mesirow Financial Alex Blanton - Clear Harbor Asset Management Stephen Volkmann - Jefferies Operator Good morning, ladies and gentlemen, and welcome to the Titan Intern ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 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) (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identificatio ...