Company Quick10K Filing
Titan International
Financial Filings
10-K 2019-12-31 Filed 2020-03-04
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-01
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-03-07
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-03
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-02-25
10-Q 2015-06-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-07-29
10-Q 2015-03-31 Filed 2015-04-30
10-K 2014-12-31 Filed 2015-02-26
10-Q 2014-09-30 Filed 2014-10-28
10-Q 2014-06-30 Filed 2014-07-24
10-Q 2014-03-31 Filed 2014-04-24
10-K 2013-12-31 Filed 2014-02-20
10-Q 2013-09-30 Filed 2013-10-29
10-Q 2013-06-30 Filed 2013-07-24
10-Q 2013-03-31 Filed 2013-04-24
10-K 2012-12-31 Filed 2013-02-27
10-Q 2012-09-30 Filed 2012-10-24
10-Q 2012-06-30 Filed 2012-07-26
10-Q 2012-03-31 Filed 2012-04-26
10-K 2011-12-31 Filed 2012-02-23
10-Q 2011-06-30 Filed 2011-07-27
10-Q 2011-03-31 Filed 2011-04-27
10-K 2010-12-31 Filed 2011-02-24
10-Q 2010-12-31 Filed 2011-11-09
10-Q 2010-09-30 Filed 2010-10-28
10-Q 2010-06-30 Filed 2010-07-28
10-Q 2010-03-31 Filed 2010-04-26
10-K 2009-12-31 Filed 2010-02-25
Current Reports
8-K 2020-03-04 Earnings, Exhibits
8-K 2019-11-07 Earnings, Exhibits
8-K 2019-10-03 Other Events, Exhibits
8-K 2019-08-01 Earnings, Exhibits
8-K 2019-06-12 Officers, Exhibits
8-K 2019-06-12 Shareholder Vote
8-K 2019-05-17 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-05-03 Officers
8-K 2019-05-03 Earnings, Exhibits
8-K 2019-03-25 Other Events, Exhibits
8-K 2019-03-07 Earnings, Exhibits
8-K 2019-02-26 Other Events, Exhibits
8-K 2019-02-25 Other Events, Exhibits
8-K 2019-02-25 Enter Agreement, Exhibits
8-K 2019-02-11 Enter Agreement, Sale of Shares, Exhibits
8-K 2018-11-20 Regulation FD, Exhibits
8-K 2018-11-02 Earnings, Exhibits
8-K 2018-08-03 Earnings, Exhibits
8-K 2018-07-10 Officers, Exhibits
8-K 2018-06-14 Officers, Exhibits
8-K 2018-06-12 Shareholder Vote
8-K 2018-05-03 Earnings, Exhibits
8-K 2018-05-02 Officers
8-K 2018-04-16 Officers, Exhibits
8-K 2018-02-23 Earnings, Exhibits
TWI 2019-12-31
Content
Part I
Item 1 - Business
Item 1A - Risk Factors
Item 1B - Unresolved Staff Comments
Item 2 - Properties
Item 3 - Legal Proceedings
Item 4 - Mine Safety Disclosures
Part II
Item 5 - Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6 - Selected Financial Data
Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A - Quantitative and Qualitative Disclosures About Market Risk
Item 8 - Financial Statements and Supplementary Data
Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A - Controls and Procedures
Item 9B - Other Information
Part III
Item 10 - Directors, Executive Officers, and Corporate Governance
Item 11 - Executive Compensation
Item 12- Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13 - Certain Relationships and Related Transactions and Director Independence
Item 14 - Principal Accounting Fees and Services
Part IV
Item 15 - Exhibits and Financial Statement Schedules
Item 16 - Form 10-K Summary
Exhibits
EX-4.1 twi12312019ex41.htm
EX-21 twi12312019ex21.htm
EX-31.1 twi12312019ex311.htm
EX-31.2 twi12312019ex312.htm
EX-32 twi12312019ex32.htm

Titan International Earnings 2019-12-31

TWI 10K Annual Report

Balance SheetIncome StatementCash Flow
2.11.71.30.80.40.02012201420172020
Assets, Equity
 0.60.50.30.20.0-0.12012201420172020
Rev, G Profit, Net Income
 0.40.30.20.0-0.1-0.22012201420172020
Ops, Inv, Fin
Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
logoa07a01a05.jpg
FORM 10-K
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
or
☐
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 or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
2701 Spruce Street, Quincy, IL 62301
(Address of principal executive offices)
(217) 228-6011
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common stock, $0.0001 par value
TWI
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:   None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.  Yes ☐ No ☑
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐  No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☑  No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
 
Accelerated filer
☑
Non-accelerated filer (Do not check if a smaller reporting company)
☐
 
Smaller reporting company
☐
 
 
 
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐  No ☑
The aggregate market value of the shares of common stock of the registrant held by non-affiliates as of June 28, 2019, was approximately $162 million based upon the last reported sale price of the common stock on the New York Stock Exchange on June 28, 2019.
Indicate the number of shares of Titan International, Inc. outstanding: 60,361,992 shares of common stock, $0.0001 par value, as of February 25, 2020.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy statement for the annual meeting of stockholders, to be held on June 11, 2020, are incorporated by reference into Part III of this Form 10-K.


TITAN INTERNATIONAL, INC.
Index to Annual Report on Form 10-K
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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FORWARD-LOOKING STATEMENTS
This Form 10-K contains forward-looking statements, which are covered by the "Safe Harbor for Forward-Looking Statements" provided by the Private Securities Litigation Reform Act of 1995. Readers can identify these statements by the fact that they do not relate strictly to historical or current facts. The Company tried to identify forward-looking statements in this report by using words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” and “believes,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could.” These forward-looking statements include, among other items, statements relating to the following:
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The Company's financial performance;
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Anticipated trends in the Company’s business;
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Expectations with respect to the end-user markets into which the Company sells its products (including agricultural equipment, earthmoving/construction equipment, and consumer products);
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Future expenditures for capital projects;
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The Company’s ability to continue to control costs and maintain quality;
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The Company's ability to meet conditions of loan agreements;
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The Company’s business strategies, including its intention to introduce new products;
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Expectations concerning the performance and success of the Company’s existing and new products; and
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The Company’s intention to consider and pursue acquisition and divestiture opportunities.
Readers of this Form 10-K should understand that these forward-looking statements are based on the Company’s current expectations and assumptions about future events and are subject to a number of risks, uncertainties, and changes in circumstances that are difficult to predict, including those in Part 1, Item 1A of this report, “Risk Factors,” certain of which are beyond the Company’s control.

Actual results could differ materially from those expressed in, or implied by, these forward-looking statements as a result of various factors, including:
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The effect of a recession on the Company and its customers and suppliers;
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Changes in the Company’s end-user markets into which the Company sells its products as a result of domestic and world economic or regulatory influences or otherwise;
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Changes in the marketplace, including new products and pricing changes by the Company’s competitors;
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Ability to maintain satisfactory labor relations;
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Unfavorable outcomes of legal proceedings;
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The Company's ability to comply with current or future regulations applicable to the Company's business and the industry in which it competes or any actions taken or orders issued by regulatory authorities;
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Availability and price of raw materials;
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Levels of operating efficiencies;
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The effects of the Company's indebtedness and its compliance with the terms thereof;
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Changes in the interest rate environment and their effects on the Company's outstanding indebtedness;
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Unfavorable product liability and warranty claims;
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Actions of domestic and foreign governments, including the imposition of additional tariffs;
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Geopolitical and economic uncertainties relating to the countries in which the Company operates or does business;
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Risks associated with acquisitions, including difficulty in integrating operations and personnel, disruption of ongoing business, and increased expenses;
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Results of investments;
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The effects of potential processes to explore various strategic transactions, including potential dispositions;
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Fluctuations in currency translations;
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Climate change and related laws and regulations;

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Risks associated with environmental laws and regulations;
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Risks relating to our manufacturing facilities, including that any of our material facilities may become inoperable; and
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Risks related to financial reporting, internal controls, tax accounting, and information systems.
Any changes in such factors could lead to significantly different results.  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.  Forward-looking statements speak only as of the date of this report. 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 and assumptions contained in this document will in fact transpire. The reader should not place undue reliance on the forward-looking statements included in this report or that may be made elsewhere from time to time by the Company, or on its behalf. All forward-looking statements attributable to Titan are expressly qualified by these cautionary statements.


PART I

ITEM 1 – BUSINESS

OVERVIEW
Titan International, Inc., together with its subsidiaries (Titan or the Company), is a global wheel, tire, and undercarriage industrial manufacturer and supplier that services customers across the globe.  Titan traces its roots to the Electric Wheel Company in Quincy, Illinois, which was founded in 1890.  Titan was originally incorporated in 1983 and has increased its global footprint and enhanced product offerings through major acquisitions which include the following:
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2005 - The Goodyear Tire & Rubber Company’s North American farm tire assets
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2006 - Off-the-road (OTR) tire assets of Continental Tire North America
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2011 - The Goodyear Tire & Rubber Company's Latin American farm tire business
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2012 - 56% controlling interest in Planet Corporation Group, now known as Titan Australia
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2013/2014 - a noncontrolling interest in Voltyre-Prom, a leading producer of agricultural and industrial tires, which owns and operates an over two million square foot manufacturing facility located in Volgograd Russia; and
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2018 - the remaining 44% interest in Titan Australia
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2019 - additional 21.4% noncontrolling interest in Voltyre-Prom (from 42.9% to 64.3%)

As a leading manufacturer in the off-highway industry, Titan produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets.  Titan manufactures and sells certain tires under the Goodyear Farm Tire and Titan Tire brands and has complete research and development facilities to validate wheel and rim designs.

BUSINESS SEGMENTS
Titan designs and manufactures products for OEMs and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. For additional information concerning the revenues, expenses, income from operations, and assets attributable to each of the segments in which the Company operates, see Note 28 to the Company's consolidated financial statements, included in Part II, Item 8 of this annual report.

AGRICULTURAL SEGMENT
Titan’s agricultural rims, wheels, tires, and undercarriage systems and components are manufactured for use on various agricultural 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 distribution centers.  The wheels and rims range in diameter from nine inches to 54 inches, with the 54-inch diameter being the largest agricultural wheel manufactured in North America.  Basic configurations are combined with distinct variations (such as different centers and a wide range of material thickness) allowing the Company to offer a broad line of products to meet customer specifications. Titan’s agricultural tires range from approximately one foot to approximately seven feet in outside diameter and from five inches to 55 inches in width.  The Company offers the added value of delivering a complete wheel and tire assembly to OEM and aftermarket customers.


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EARTHMOVING/CONSTRUCTION SEGMENT
The Company manufactures rims, wheels, tires, and undercarriage systems and components for various types of OTR earthmoving, mining, military, construction, and forestry equipment, including skid steers, aerial lifts, cranes, graders and levelers, scrapers, self-propelled shovel loaders, articulated dump trucks, load transporters, haul trucks, backhoe loaders, crawler tractors, lattice cranes, shovels, and hydraulic excavators.  The Company provides OEM and aftermarket customers with a broad range of earthmoving/construction wheels ranging in diameter from 15 to 63 inches and in weight from 125 pounds to 7,000 pounds.  The 63-inch diameter wheel is the largest manufactured in North America for the earthmoving/construction market. Titan’s earthmoving/construction tires range from approximately three feet to approximately 13 feet in outside diameter and in weight from 50 pounds to 12,500 pounds.  The Company also offers the added value of wheel and tire assembly for certain applications in the earthmoving/construction segment.

CONSUMER SEGMENT
Titan manufactures bias truck tires in Latin America and light truck tires in Russia.  Titan also offers select products for ATVs, turf, and golf cart applications. This segment also includes sales that do not readily fall into the Company's other segments.

COMPETITIVE STRENGTHS
Titan’s strong market position in the off-highway wheel, tire, and undercarriage market and its long-term core customer relationships contribute to the Company’s competitive strengths.  Titan's production of both wheels and tires enables the Company to provide a one-stop solution for its customers' wheel and tire assembly needs. These strengths, along with Titan’s dedication to the off-highway equipment market, continue to drive the Company forward.

•
Strong Market Position
As a result of Titan’s offering of a broad range of specialized wheels, tires, assemblies, and undercarriage systems and components, Titan is a leader in the global off-highway market.  Through an extensive dealer network and sales force, the Company is able to reach an increasing number of aftermarket and OEM customers which build Titan’s image and brand recognition.  The Company’s production of the Goodyear Farm Tire brand in North America, Latin America, Europe, the Middle East and Africa contributes to overall visibility and customer confidence. Years of product design and engineering experience have enabled Titan to improve existing products and develop new ones, such as Low Sidewall (LSW®), which have been well received in the marketplace.  Titan believes it has benefited from significant barriers to entry, such as the substantial investment necessary to replicate the Company’s manufacturing equipment and numerous tools, dies and molds, many of which are used in custom processes.

•
Wheel and Tire Manufacturing Capabilities
The Company’s position as a manufacturer of both wheels and tires allows Titan to mount and deliver one of the largest selections of off-highway assemblies in North America. Both standard and LSW assemblies are delivered as a single, complete unit based on each customer’s specific requirements. Titan offers this value-added service for wheel and tire assemblies for the agricultural, earthmoving/construction, and consumer segments.  

•
Long-Term Core Customer Relationships
The Company’s top customers, including global leaders in agricultural and construction equipment manufacturing, have been purchasing products from Titan or its predecessors for numerous years.  Customers including AGCO Corporation, Caterpillar Inc., CNH Global N.V., Deere & Company, Hitachi, Ltd., Kubota Corporation, Liebherr, and Volvo have helped sustain Titan’s market leading position in wheel, tire, assembly, and undercarriage products.

BUSINESS STRATEGY
Titan’s strategy is to become the worldwide leader in manufacturing and distribution of wheels, tires, assemblies and undercarriage products and to serve our customers' needs through product innovation and quality service in the Company's key markets: agriculture, earthmoving/construction, and consumer. Other strategic considerations include:

•
Tire Technology
The Company has developed an LSW tire technology, featuring a larger rim diameter and a smaller sidewall than standard tires. With LSW tire technology, which has been widely adopted within the automotive industry, users experience reduced power hop, road lope, soil compaction, and fuel consumption as well as improved safety and performance. Both power hop and road lope can disturb ride quality and impede equipment performance. The benefits correspond to Titan’s markets through superior comfort, ride and fuel economy. Titan continues to enhance the LSW technology and expand its LSW product and other tire offerings in both the agricultural and construction segments.




5


•
Increase Aftermarket Tire Business
The Company has concentrated on increasing Titan's presence in the tire aftermarket, which historically has been somewhat less cyclical than the OEM market. The aftermarket also offers the potential for higher profit margins and is a larger market. Titan’s strategy to enhance the Company's aftermarket platform focuses on improving the customer experience and product positioning in key sales markets. To support this strategy, the Company has a dedicated salesforce for the tire aftermarket.

•
Improve Operating Efficiencies
The Company regularly works to improve the operating efficiency of assets and manufacturing facilities. Titan integrates each facility’s strengths through, among others, transfer of equipment and business to the facilities that are best equipped to handle the work, which enables Titan to increase utilization and spread operating costs over a greater volume of products. Titan continues to implement a comprehensive program to refurbish, modernize, and enhance the technology of its manufacturing equipment. Titan has also made investments to streamline processes, increase productivity, and lower costs in the selling, general and administrative areas.

•
Enhance Design Capabilities and New Product Development
Equipment manufacturers constantly face changing industry dynamics. Titan directs its business and marketing strategy to understand and address the needs of customers and demonstrate the advantages of products. In particular, the Company often collaborates with customers in the design of new and enhanced products and recommends modified products to customers based on the Company's own market information. These value-added services enhance Titan’s relationships with customers. The Company tests new designs and technologies and develops manufacturing methods to improve product quality, performance, and cost.

•
Reduction of Non-Core Assets and Other Strategic Considerations
The Company is exploring reducing non-core assets and improving underperforming assets in an effort to improve cash flow and working capital and reduce debt. The Company’s expertise in the manufacture of off-highway wheels, tires, and undercarriage systems and components has permitted it to take advantage of opportunities to acquire businesses that complement this product line. In the future, Titan may consider strategic partnerships, joint ventures or make additional strategic acquisitions of businesses that have an off-highway focus. The Company continually explores worldwide opportunities to expand its manufacturing and distribution capabilities in order to serve new and existing geographies.

 COMPETITION
The Company competes with several domestic and international companies, some of which are larger and have greater financial and marketing resources than Titan.  The Company believes it is a primary source of steel wheels and rims to the majority of its North American customers.  Major competitors in the off-highway wheel market include GKN Wheels, Ltd., Trelleborg Group, and Topy Industries, Ltd.  Significant competitors in the off-highway tire market include Alliance Tire Company Ltd., Balkrishna Industries Limited (BKT), Bridgestone/Firestone, Michelin, Mitas a.s., and Pirelli. Significant competitors in the undercarriage market include Berco and Caterpillar.
 
The Company competes on the basis of price, quality, sales support, customer service, design capability, and delivery time.  The Company's position of manufacturing both the wheel and the tire allows Titan to provide innovative assembly solutions for our customers, creating a competitive advantage in the marketplace. The Company’s ability to compete with international competitors may be adversely affected by various factors, including currency fluctuations and tariffs imposed by domestic and foreign governments.  Titan owns the molds and dies used to produce its wheels and tires. However, certain of the Company’s OEM customers could elect to manufacture their own products to meet their requirements or to otherwise compete with the Company.  The Company may be adversely affected by increased competition in the markets in which it operates, or competitors developing products that are more effective, less expensive, or otherwise rendering certain of Titan’s products less competitive.  From time to time, certain of the Company’s competitors have reduced their prices in particular product categories, which has prompted Titan to reduce prices as well.  There can be no assurance that competitors of the Company will not further reduce prices in the future or that any such reductions would not have a material adverse effect on the Company.

OPERATIONS
Titan’s operations include manufacturing wheels, manufacturing tires, combining these wheels and tires into assemblies, and manufacturing undercarriage systems and components for use in the agricultural, earthmoving/construction, and consumer markets.  These operations entail many manufacturing processes in order to complete the finished products.


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•
Wheel Manufacturing Process
Most agricultural wheels are produced using a rim and a center disc. A rim is produced by first cutting large steel sheets to required width and length specifications. These steel sections are rolled and welded to form a circular rim, which is flared and formed in the rollform operation. The majority of discs are manufactured using presses that both blank and form the center to specifications in multiple stage operations. The Company e-coats wheels using a multi-step process prior to the final paint top coating.
 
Large earthmoving/construction steel wheels are manufactured from hot and cold-rolled steel sections. Hot-rolled sections are generally used to increase cross section thickness in high stress areas of large diameter wheels. A special cold forming process for certain wheels is used to increase cross section thickness while reducing the number of wheel components. Rims are built from a series of hoops that are welded together to form a rim base. The complete rim base is made from either three or five separate parts that lock together after the rubber tire has been fitted to the wheel, the parts have been fully assembled, and the assembly inflated.
 
For most wheels in our consumer segment, the Company manufactures rims and center discs from rolled and flat steel. Rims are rolled and welded, and discs are stamped and formed from the sheets. The manufacturing process then entails welding the rims to the centers and painting the assembled product.

•
Tire Manufacturing Process
The first stage in tire production is the mixing of rubber, carbon black, and chemicals to form various rubber compounds. These rubber compounds are then extruded and processed with textile or steel materials to make specific components. These components – beads (wire bundles that anchor the tire with the wheel), plies (layers of fabric that give the tire strength), belts (fabric or steel fabric wrapped under the tread in some tires), tread, and sidewall – are then assembled into an uncured tire carcass. The uncured carcass is placed into a press that molds and vulcanizes the carcass under set time, temperature, and pressure into a finished tire.

•
Wheel and Tire Assemblies
The Company’s position as a manufacturer of both wheels and tires allows Titan to mount and deliver one of the largest selections of off-highway assemblies in North America. Titan offers this value-added service of one-stop solution for wheel and tire assemblies for the agricultural, earthmoving/construction, and consumer segments. Both standard and LSW assemblies are delivered as a single, complete unit based on each customer’s specific requirements.

•
Undercarriage Manufacturing Process
The undercarriage components (track groups, track and carrier rollers, idler assemblies, and sprockets) are all manufactured from steel and produced according to customer specifications.

All of the track groups produced by the Company are built from four major parts: shoes, right and left hand links, pins, and bushings. Shoes are manufactured from steel cast in the Company foundry or obtained from different shapes of hot rolled profiles (depending on application), sheared to length, and then heat treated for high wear bending and breaking resistance. Right and left hand links are hot forged, trimmed, mass heat treated, machined, and finally induction hardened on rail surface for optimal wear and fatigue resistance. Pins are made from round bars that are cut, machined, heat treated, and surface finished. Bushings are generally cold extruded, machined, mass heat treated, and finally carburized or induction hardened for wear resistance and optimal toughness.
 
The lifetime lubricated and maintenance-free track and carrier rollers are assembled with two major components: single or double flange roller shells (typically hot forged in halves, deep hardened, friction or arc welded, and finish machined with metallurgical characteristics depending upon size and application) and shafts (generally cut from bars or forged, mass heat treated, rough machined, induction hardened, and ground).
 
The idler assemblies are also lifetime lubricated, for virtually no maintenance. They are offered with cast (single web or hollow design) or fabricated shells, depending on size and application, and feature induction-hardened tread surfaces for optimal wear resistance.
 
The sprockets, designed to transfer the machine driving loads from the final drive to the track, are produced cast or forged in several geometric options, depending upon size and application. They are also heat treated for wear resistance and cracking resistance.
 
The undercarriage systems, custom designed and produced by the Company, consist of a structured steel fabricated frame, all the undercarriage components mentioned above (track groups, track and carrier rollers, idler assemblies, and sprockets) and a final drive. They are completely assembled in house, for consistent quality.

7



•
Quality Control
The Company is ISO certified at all four main domestic manufacturing facilities located in Bryan, Ohio; Des Moines, Iowa; Freeport, Illinois; and Quincy, Illinois, as well as the majority of the foreign manufacturing facilities.  The ISO series is a set of related and internationally recognized standards of management and quality assurance.  The standards specify guidelines for establishing, documenting, and maintaining a system to ensure quality.  The ISO certifications are a testament to Titan’s dedication to providing quality products for its customers.

•
International Operations
The Company operates manufacturing facilities in Latin America, Europe and Russia. The Latin American, European and Russian operations accounted for 18%, 22%, and 6% of the Company's net sales, respectively, for the year ended December 31, 2019 and 17%, 23% and 6% of net sales, respectively, for the year ended December 31, 2018.

RAW MATERIALS
Steel, natural rubber, synthetic rubber, carbon black, bead wire, and fabric are the primary raw materials used by the Company.  To ensure a consistent steel supply, Titan purchases raw steel from various steel mills and maintains relationships with steel processors for steel preparation.  The Company is not dependent on any single producer for its steel supply; however, some components do have limited suppliers.  Rubber and other raw materials for tire manufacture represent some of the Company’s largest commodity expenses.  Titan has developed a procurement strategy and practice designed to mitigate price risk and lower cost. Titan buys rubber in markets where there are usually several sources of supply.  In addition to the development of key domestic suppliers, the Company’s strategic procurement plan includes international steel and rubber suppliers to assure competitive price and quality in the global marketplace.  As is customary in the industry, the Company does not have long-term contracts for the purchase of steel or rubber and, therefore, purchases are subject to price fluctuations.

RESEARCH, DEVELOPMENT, AND ENGINEERING
The Company’s research, development, and engineering staff tests original designs and technologies and develops new manufacturing methods to improve product performance.  Titan’s engineering and manufacturing resources are focused on designing quality products that address the needs of our customers and end-users across the markets that Titan serves.  Titan’s team of experienced engineers continuously work on new and improved engineered solutions that evolve with today’s applications for the off-highway wheel, tire, and assembly markets. Titan's advantage as both a wheel and tire manufacturer allows the Company to design, test, and bring to market innovative solutions to meet the specific needs of its customers. For example, Titan has developed the LSW technology, featuring a larger rim diameter and a smaller sidewall than standard tires, which helps reduce power hop, road lope, soil compaction, and provides improved safety and performance. Research and development (R&D) expenses are expensed as incurred.  R&D costs were $9.9 million, $11.1 million, and $10.3 million for the years ended December 31, 2019, 2018, and 2017, respectively.

CUSTOMERS
Titan’s 10 largest customers accounted for 38% of net sales for the year ended December 31, 2019, and 35% for the year ended December 31, 2018.  Net sales to Deere & Company in Titan's agricultural, earthmoving/construction, and consumer segments combined represented 11% of the Company's consolidated revenues for the year ended December 31, 2019. No other customer accounted for 10% or more of Titan's net sales in 2019.  Management believes the Company is not dependent on any single customer; however, certain products are dependent on a few customers.  While the loss of any substantial customer could impact Titan’s business, the Company believes that its diverse product mix and customer base should minimize a longer-term impact caused by any such loss.

ORDER BACKLOG
The Company's backlog of orders is not considered material to, or a significant factor in, evaluating and understanding any of the Company's business segments or Titan's businesses considered as a whole.

MARKETING AND DISTRIBUTION
The Company employs an internal sales force and utilizes several manufacturing representative firms for sales in North America, Europe, Latin America, the CIS region, and other worldwide locations.  Sales representatives are primarily organized within geographic regions.

Titan distributes wheels, tires, assemblies, and undercarriage systems directly to OEMs. The distribution of aftermarket tires occurs primarily through a network of independent and OEM-affiliated dealers.


8


SEASONALITY
Agricultural equipment sales are seasonal by nature.  Farmers generally order equipment to be delivered before the growing season.  Shipments to OEMs in the agricultural industry in the U.S. and Europe usually peak during the Company’s first and second quarters for the spring planting period, while shipments in Latin America usually peak during the Company's second and third quarters for the fall planting period.  Earthmoving/construction and consumer segments have historically experienced higher demand in the first and second quarters.  These segments are affected by mining, building, and economic conditions.

EMPLOYEES
At December 31, 2019, the Company employed approximately 6,200 people worldwide, including approximately 4,200 located outside the United States.

At December 31, 2019, the employees at each of the Company's Bryan, Ohio; Freeport, Illinois; and Des Moines, Iowa facilities, which collectively account for approximately 37% of the Company’s U.S. employees, were covered by collective bargaining agreements which are scheduled to expire in November 2021.

Outside the United States, the Company enters into employment agreements in those countries in which such relationships are mandatory or customary. The provisions of these agreements generally correspond in each case with the required or customary terms in the subject jurisdiction.

PATENTS, TRADEMARKS, AND ROYALTIES
The Company owns various patents and trademarks and continues to apply for patent protection for new products.  Due to the difficult nature of predicting the interpretation of patent laws, the Company cannot anticipate or predict any material adverse effect on its operations, cash flows, or financial condition to the extent the Company is unable to protect its patents or should the Company be found to be infringing others' patents.

The Company has trademark license agreements with The Goodyear Tire & Rubber Company to manufacture and sell certain farm tires under the Goodyear name. These agreements cover sales in North America, Latin America, Europe, the Middle East, Africa, Russia, and other Commonwealth of Independent States countries. Each of these agreements is scheduled to expire in 2025. The Company also has a trademark license agreement with Goodyear to manufacture and sell certain non-farm tire products in Latin America under the Goodyear name.

ENVIRONMENTAL LAWS AND REGULATIONS
The Company's policy is to conduct its global operations in accordance with all applicable laws, regulations and other requirements. In the ordinary course of business, similar to other industrial manufacturing companies, Titan is subject to extensive and evolving federal, state, local, and international environmental laws and regulations. From time to time, the Company has, and may in the future, incurred costs and additional charges associated with environmental compliance and cleanup projects, including remediation activities. As appropriate, the Company makes provisions for the estimated financial impact of potential environmental cleanup activities.  The Company’s policy is to accrue environmental cleanup-related costs of a non-capital nature when those costs are believed to be probable and can be reasonably estimated.  Expenditures that extend the life of the related property, or mitigate or prevent future environmental contamination, are capitalized. The Company does not currently anticipate any material capital expenditures for environmental control facilities.  The quantification of environmental exposures requires an assessment of many factors, including changing laws and regulations, advances in environmental technologies, the quality of information available related to specific sites, the assessment stage of the site investigation, preliminary findings, and the length of time involved in remediation or settlement.  Due to the difficult nature of predicting future environmental costs, the Company may not be able to anticipate or predict with certainty the potential material adverse effect on its operations, cash flows, or financial condition as a result of efforts to comply with, or any future liability under, environmental laws, regulations or other requirements.


9


AVAILABLE INFORMATION
The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports are made available, without charge, through the Company’s website located at www.titan-intl.com under "Investor Relations" as soon as reasonably practicable after they are filed with the Securities and Exchange Commission (SEC).  You can also obtain copies of these materials by accessing the SEC’s website at www.SEC.gov.  The following documents are also posted on the Company’s website:
 
•
Corporate Governance Policy
•
Code of Business Conduct
•
Audit Committee Charter
•
Compensation Committee Charter
•
Nominating Committee Charter
•
Corporate Governance Committee Charter
 
Printed copies of these documents are available, without charge, by writing to:  Titan International, Inc.,
c/o Corporate Secretary, 2701 Spruce Street, Quincy, IL 62301.

The information on, or that may be accessed through, the aforementioned websites is not incorporated into this filing and should not be considered a part of this filing.


ITEM 1A – RISK FACTORS

The Company is subject to various risks and uncertainties that it believes are significant to our business. These risks relate to or arise out of the nature of the Company's business and overall business, economic, financial, legal, and other factors or conditions that may affect the Company. In addition to risks discussed elsewhere in this report, the following are factors that could, individually or in the aggregate, materially adversely affect the Company’s business, financial condition and results of operations and cause the Company's actual results to differ from past results and/or those anticipated, estimated or projected. In addition, other risks not presently known to the Company or that the Company currently believes to be immaterial may also adversely affect the Company’s business, financial condition and results of operations, perhaps materially. It is impossible to predict or identify all such risks and uncertainties and, as a result, you should not consider the following factors to be a complete discussion of all risks or uncertainties that may impact the Company’s business, financial condition or results of operations.

•
The Company is exposed to price fluctuations of key commodities.
The Company uses various raw materials, most significantly steel, natural rubber, synthetic rubber, carbon black, bead wire, and fabric in manufacturing its products across all of its market segments. The Company does not generally enter into long-term commodity contracts and does not use derivative commodity instruments to hedge exposures to commodity market price fluctuations.  Therefore, the Company is exposed to price fluctuations of key commodities.  Although the Company attempts to pass on certain material price increases to its customers, there is no assurance that the Company will be able to do so in the future.  Any increase in the price of steel and rubber that is not passed on to customers could result in declining margins and have a material adverse effect on Titan’s financial condition and results of operations.
 
•
The Company relies on a limited number of suppliers.
The Company currently relies on a limited number of suppliers for certain key commodities, which consist primarily of steel and rubber, in the manufacturing of Titan products.  If the Company’s suppliers are unable to provide raw materials to Titan in a timely manner, or are unable to meet our quality, quantity or cost requirements, the Company may not in all cases be able to promptly obtain substitute sources. Any extended delay in receiving critical materials could impair Titan’s ability to deliver products to its customers. The loss of key suppliers, the inability to establish relationships with replacement suppliers, or the inability of Titan's suppliers to meet price, quality, quantity, and delivery requirements could have a significant adverse impact on the Company’s results of operations.






10


•
The Company’s revolving credit facility and other debt obligations contain covenants that could limit the Company's financial and operational flexibility.
The Company’s revolving credit facility, the indenture relating to the Company’s 6.50% senior secured notes due 2023 and other debt obligations contain covenants and restrictions that may impact the Company’s business. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Debt Restrictions” below for a further discussion of these covenants and restrictions. A breach of one or more of the covenants could result in adverse consequences that could negatively impact the Company's business, results of operations and financial condition. These consequences could limit Titan’s ability to respond to market conditions, to provide for unanticipated capital investments, to raise additional debt or equity capital, to pay dividends, or to take advantage of business opportunities, including future acquisitions.  Titan’s ability to comply with the covenants may be affected by events beyond its control, including prevailing economic, financial, and industry conditions.
 
•
The Company operates in cyclical industries and is subject to changes in the economy.
The Company's sales are substantially dependent on three major industries: agricultural equipment, earthmoving/construction equipment, and consumer products.  The business activity levels in these industries are subject to specific industry and general economic cycles.  Any downturn in these industries or the general economy could drive decreases in demand for Titan’s products and have a material adverse effect on Titan’s business.
 
The agricultural equipment industry is affected by crop prices, farm income and farmland values, weather, export markets, and government policies. The earthmoving/construction industry is affected by the levels of government and private construction spending and replacement demand. The mining industry, which is within the earthmoving/construction industry, is affected by raw material commodity prices. The consumer products industry is affected by consumer disposable income, weather, competitive pricing, energy prices, and consumer attitudes. In addition, the performance of these industries is sensitive to interest rate and foreign exchange rate changes and varies with the overall level of economic activity. The cyclicality and volatility of the industries on which our sales are substantially dependent results in significant fluctuations in profits and cash flow from period to period and over the business cycle.

•
The Company’s revenues are seasonal in nature due to Titan’s dependence on seasonal industries.
The agricultural, earthmoving/construction, and consumer markets are seasonal, with typically lower sales during the second half of the year. This seasonality in demand has resulted in fluctuations in the Company’s revenues and operating results between the first half and the second half of the year.  Because much of Titan’s overhead expenses are fixed, seasonal trends can cause volatility in profit margins and Titan's financial condition, especially during slower periods. 

•
The Company’s customer base is relatively concentrated.
The Company’s ten largest customers, which are primarily original equipment manufacturers (OEMs), accounted for 38% of Titan’s net sales for 2019. Net sales to Deere & Company represented 11% of total 2019 sales. No other customer accounted for 10% or more of Titan's net sales in 2019. Titan’s business could be adversely affected if one of its larger customers reduces, or otherwise eliminates in full, its purchases from Titan due to work stoppages or slow-downs, financial difficulties, as a result of termination provisions, competitive pricing, or other reasons.  There is also continuing pressure from OEMs to reduce costs, including the cost of products and services purchased from outside suppliers such as Titan, and in that regard OEMs may develop in-house tire and wheel capabilities.  There can be no assurance that Titan will be able to maintain its long-term relationships with its major customers which could have an adverse effect on the Company's results of operations.
 
•
The Company may be adversely affected by changes in government regulations and policies.
Domestic and foreign political developments and government regulations and policies directly affect the agricultural, earthmoving/construction, and consumer products industries in the United States and abroad. Regulations and policies in the agricultural industry such as those concerning greenhouse gas emissions in the United States and ongoing U.S. budget issues could negatively impact the Company's business. The earthmoving/construction industry is affected by changes in construction activity, housing starts, and other regulations related to the mining and the construction of roads, bridges, and infrastructure. The modification or adoption of existing laws, regulations, or policies could have an adverse effect on any one or more of these industries and, therefore, on Titan’s business.





11


Additionally, on January 31, 2020, the United Kingdom (UK) officially withdrew from the EU (Brexit), subject to a transition period until December 31, 2020, which could be extended up to two years under certain conditions (the Brexit Transition Period). There is uncertainty as to the scope, nature and terms of the relationship between the UK and the EU after the Brexit Transition Period. This uncertainty could adversely impact customer or investor confidence, result in additional market volatility, legal uncertainty and divergent national laws and regulations.
 
•
The Company is subject to corporate governance requirements, and costs related to compliance with, or failure to comply with, existing and future requirements could adversely affect Titan’s business.
The Company is subject to corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as rules and regulations of the Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), and the New York Stock Exchange (NYSE). These laws, rules, and regulations continue to evolve and may become increasingly restrictive in the future. Failure to comply with these laws, rules, and regulations may have a material adverse effect on Titan’s reputation, financial condition, and the value of the Company’s securities.
 
•
The Company is subject to risks associated with maintaining adequate disclosure controls and internal controls over financial reporting.
Failure to maintain adequate financial and management processes and controls could affect the accuracy and timing of the Company's financial reporting. Testing and maintaining effective internal control over financial reporting and disclosures involves significant costs and could divert management's attention from other matters that are important to Titan's business. If the Company does not maintain adequate financial and management personnel, processes, and controls, it may not be able to accurately report its financial performance on a timely basis, the Company may be otherwise unable to comply with the periodic reporting requirements of the Securities and Exchange Commission and the listing of the Company’s common stock on the NYSE could be suspended or terminated, each of which could have a material adverse effect on the confidence in the Company's financial reporting, its credibility in the marketplace, and the trading price of Titan's common stock.

•
The Company faces substantial competition from domestic and international companies.
The Company competes with several domestic and international competitors, some of which are larger and have greater financial and marketing resources than Titan.  Titan competes on the basis of price, quality, sales support, customer service, design capability, and delivery time.  The Company’s ability to compete with international competitors may be adversely affected various factors including, currency fluctuations and tariffs imposed by domestic and foreign governments.  In addition, certain OEM customers could elect to manufacture certain products to meet their own requirements or to otherwise compete with Titan. The success of the Company's business depends in large part on its ability to provide comprehensive wheel and tire assemblies to its customers. The development or enhancement by Titan's competitors of similar capabilities could adversely affect its business.

There can be no assurance that Titan’s businesses will not be adversely affected by increased competition in the Company’s markets, or that competitors will not develop products that are more effective or less expensive than Titan products or which could render certain products less competitive.  From time to time certain competitors have reduced prices in particular product categories, which has caused Titan to reduce prices. There can be no assurance that in the future Titan’s competitors will not further reduce prices or that any such reductions would not have a material adverse effect on Titan’s business.

•
The Company may be affected by unfair trade.
Titan faces intense competition from producers both in the United States and around the world, some of which may engage in unfair trade practices.  For example, in early January 2016, Titan, along with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Worker International Union, AFL-CIO, CLC of Pittsburgh, Pennsylvania, filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) alleging that imported off-the-road tires from India and Sri Lanka and wheel and tire assemblies from China were being dumped and/or subsidized and were a cause of material injury to the domestic industry. Unfair trade may have a material adverse effect on Titan's business.

•
The Company could be negatively impacted if Titan fails to maintain satisfactory labor relations.
Titan is party to collective bargaining agreements covering a portion of the Company's workforce. If Titan is unable to maintain satisfactory labor relations with its employees covered by collective bargaining agreements, these employees could engage in strikes, or the Company may otherwise experience work slowdowns or be subject to other labor actions. Any such actions, and any other labor disputes with the Company’s employees domestically or internationally, could materially disrupt its operations. Future collective bargaining agreements may impose significant additional costs on Titan, which could adversely affect its financial condition and results of operations.

12



•
Unfavorable outcomes of legal proceedings could adversely affect Titan's results of operations.
The Company is a party to routine legal proceedings arising out of the normal course of business.  Due to the difficult nature of predicting unresolved and future legal claims, the Company cannot anticipate or predict any material adverse effect on its consolidated financial condition, results of operations, or cash flows as a result of efforts to comply with, or its liabilities pertaining to, legal judgments. Any adverse outcome in any litigation involving Titan or any of its subsidiaries could negatively affect the Company's business, reputation, and financial condition.
 
•
Acquisitions/divestitures may require significant resources and/or result in significant losses, costs, or liabilities.
Any future acquisitions or divestitures will depend on the Company’s ability to identify suitable opportunities, to negotiate acceptable terms, and to finance acquisitions. Titan will also face competition for suitable acquisition candidates, which may increase costs. In addition, acquisitions and divestitures require significant managerial attention, which may be diverted from current operations. Furthermore, acquisitions and divestitures of businesses or facilities entail a number of additional risks and challenges including: integrating acquisitions with existing operations; and separating operations in connection with dispositions; applying internal controls and processes throughout the acquired business; potential disruption of the Company's ongoing business; inability to maintain key customer, supplier, and employee relationships; potential that transactions do not produce satisfactory returns on a timely basis or at all; and exposure to unanticipated liabilities.
 
International acquisitions or divestitures may be more complex and time consuming. Also, international acquisitions and divestitures may include a number of additional risks, including the integration of acquisitions or separation of divestitures in compliance with foreign laws and regulations and business and accounting systems.
 
Subject to the terms of its existing indebtedness, the Company may finance future acquisitions with cash from operations, additional indebtedness, and/or by issuing additional equity securities.  These commitments may impair the operation of Titan’s businesses.  In addition, the Company could face financial risks associated with incurring additional indebtedness, such as reducing liquidity and access to financing markets and increasing the amount of cash flow required to service such indebtedness.

•
The Company has international operations and purchases raw material from foreign suppliers
The Company had total aggregate net sales outside the United States of approximately $776.1 million, $890.5 million, and $826.2 million for the years ended December 31, 2019, 2018, and 2017, respectively. Net sales outside the United States have become a significant proportion of total net sales, accounting for 54% of net sales for the year ended December 31, 2019, and 56 % for each of the years ended December 31, 2018, and 2017. Net sales from these international operations are expected to continue to represent a similar portion of total net sales for the foreseeable future.

International Operations and Sales – International operations and sales are subject to a number of risks and restrictions, that are not generally applicable to Titan’s North American operations including, but not limited to, risks with respect to currency exchange rates, economic and political destabilization, other disruption of foreign markets, restrictive actions by foreign governments (such as restrictions on transfer of funds, export duties, and quotas and foreign customs) and local epidemics or pandemics such as the new coronavirus that originated in China.  Other risks include changes in foreign laws regarding trade and investment; difficulties in establishing and maintaining relationships with respect to product distribution and support; nationalization; reforms of United States laws and policies affecting trade, restrictions on foreign investment, and restrictions on loans to foreign entities; and changes in foreign tax and other laws.  There may also be restrictions on the Company's ability to repatriate earnings and investments from international operations. There can be no assurance that one or a combination of these factors will not have a material adverse effect on the Company’s ability to increase or maintain its international sales and results of operations.
 
Foreign Suppliers – The Company purchases raw materials from foreign suppliers.  The production costs, profit margins, and competitive position of the Company are affected by the strength of the currencies in countries where Titan purchases goods, relative to the strength of the currencies in countries where the products are sold.  The Company’s results of operations, cash flows, and financial position may be affected by fluctuations in foreign currencies.






13


•
The Company is subject to anti-corruption laws and regulations.
The Company has international operations and must comply with anti-corruption laws and regulations including the U.S. Foreign Corrupt Practices Act (FCPA). These anti-bribery laws generally prohibit companies and their intermediaries from making improper payments or providing anything of value for the purpose of obtaining or retaining business. The FCPA prohibits these payments regardless of local customs and practices. Safeguards that Titan may implement to discourage these practices could prove to be ineffective, and violations of these laws may result in criminal or civil sanctions or other liabilities or proceedings against Titan and could adversely affect the Company's business and reputation.
  
•
The Company may be subject to product liability and warranty claims.
The Company warrants its products to be free of certain defects and, accordingly, may be subject, in the ordinary course of business, to product liability or product warranty claims.  Losses may result or be alleged to result from defects in Titan products, which could subject the Company to claims for damages, including consequential damages.  There can be no assurance that the Company's insurance coverage will be adequate for liabilities actually incurred or that adequate insurance will be available on terms acceptable to the Company. Any claims relating to defective products that result in liability exceeding Titan’s insurance coverage could have a material adverse effect on Titan's financial condition and results of operations. Further, claims of defects could result in negative publicity against Titan, which could adversely affect the Company’s business and reputation.

•
The Company may be adversely affected by a disruption in, or failure of, information technology systems.
In the ordinary course of business, the Company relies upon information technology systems, some of which are managed by third parties, to process, transmit, and store electronic information. Technology systems are used in a variety of business processes and activities, including purchasing, manufacturing, distribution, invoicing, and financial reporting. The Company utilizes security measures and business continuity plans to prevent, detect, and remediate damage from computer viruses, natural disasters, unauthorized access (whether through cybersecurity attacks or otherwise), utility failures, and other similar disruptions. Despite Titan's security measures and safeguards, a security breach or information technology system interruption or failure may disrupt and affect the Company's business, resulting in customer dissatisfaction, potential legal claims and adversely affect Titan’s results of operations and financial conditions. There can be no assurance that any such security measures or plans will be sufficient to mitigate all potential risks to Titan's systems, networks, and information. Further a significant theft, loss, or fraudulent use of customer or employee information could adversely impact the Company's reputation and could result in unauthorized release of confidential or otherwise protected information, significant costs, fines, and litigation, including with respect to enhanced cybersecurity protection and remediation costs. The Company is currently undergoing upgrades and improvements to its core enterprise resource planning (ERP) systems which are ‘cloud based’. Despite adequate security measures, these systems are vulnerable to disruption of service and security breaches as mentioned above. Further, investment in the ‘cloud based’ systems may have an adverse impact on short-term results of operations and financial condition.

•
The Company is subject to governmental laws, regulations and other legal obligations related to privacy and data protection.
The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Titan collects personally identifiable information (PII) and other data as integral parts of its business processes and activities. This data is subject to a variety of U.S. and international laws and regulations, including oversight by various regulatory or other governmental bodies. Many foreign countries and governmental bodies, including the European Union, Canada, and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of PII and other data obtained from their residents or by businesses operating within their jurisdiction that are more restrictive than those in the U.S. Additionally, in 2016, the European Union adopted the General Data Protection Regulation (GDPR) that imposes more stringent data protection requirements and provides for greater penalties for noncompliance. Any inability, or perceived inability, to adequately address privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations could result in additional cost and liability to the Company or Company officials, damage our reputation, inhibit sales, and otherwise adversely affect our business.








14


•
The Company is subject to risks associated with climate change regulations.
Governmental regulatory bodies in the United States and other countries have adopted, or are contemplating introducing regulatory changes in response to the potential impacts of climate change.  Laws and regulations regarding climate change and energy usage may impact the Company directly through higher costs for energy and raw materials.  The Company’s customers may also be affected by climate change regulations that may impact future purchases of the Company's products.  Physical climate change may potentially have a large impact on the Company’s two largest industry segments, agriculture and earthmoving/construction.  The potential impacts of climate change and climate change regulations are highly uncertain at this time, and the Company cannot anticipate or predict any material adverse effect on its consolidated financial condition, results of operations, or cash flows as a result of climate change and climate change regulations.

 
•
The Company is subject to risks associated with environmental laws and regulations.
The Company’s operations are subject to federal, state, local, and foreign laws and regulations governing, among other things, emissions to air, discharge to waters, and the generation, handling, storage, transportation, treatment, and disposal of waste and other materials.  The Company’s operations entail risks in these areas, and there can be no assurance that Titan will not incur material costs or liabilities, including in connection with complying with the laws and regulations and any required remediation.  In addition, potentially significant expenditures could be required in order to comply with evolving environmental and health and safety laws, regulations, or requirements that may be adopted or imposed in the future. Titan’s customers may also be affected by environmental laws and regulations that may impact future purchases of the Company's products.  
 
•
The Company is subject to foreign currency translation risk.
The Company operates in many worldwide locations and transacts business in many foreign currencies. Titan's financial statements are reported in U.S. dollars with financial statements of international subsidiaries being initially recorded in foreign currencies and translated into U.S. dollars. Large fluctuations in currency exchange rates between the U.S. dollar and other global currencies may have a material adverse impact on the Company's financial condition, results of operations, and liquidity.  

•
The Company may incur additional tax expense or tax exposure.
The Company is subject to income taxes in the United States and numerous foreign jurisdictions, and has domestic and international tax liabilities which are dependent upon the distribution of income among these different jurisdictions. Titan's income tax provision and cash tax liability in the future could be adversely affected by numerous factors, including income before taxes being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws and regulations. 

•
The Company is subject to risks related to uncertainties in global and regional economic conditions.
Our results of operations are materially affected by economic conditions globally, regionally and in the particular industries we serve. The demand for our products tends to be cyclical and can be significantly reduced in periods of economic weakness characterized by lower levels of government and business investment, lower levels of business confidence, lower corporate earnings, high real interest rates, lower credit activity or tighter credit conditions, higher unemployment and lower consumer spending. Economic conditions vary across regions and countries, and demand for our products generally increases in those regions and countries experiencing economic growth and investment. Slower economic growth or a change in the global mix of regions and countries experiencing economic growth and investment could have an adverse effect on our business, results of operations and financial condition.

•
The Company is not insured against all potential losses and could be harmed by natural disasters, catastrophes, or sabotage.
The Company's business activities involve substantial investments in manufacturing facilities and products are produced at a limited number of locations. These facilities could be materially damaged, including as a result of natural disasters, such as fires, floods, tornadoes, hurricanes, and earthquakes, or by sabotage. The Company could incur uninsured losses and liabilities arising from such events, as well as damage to its reputation, and/or suffer material losses in operational capacity and efficiency, which could have a material adverse impact on Titan's business, financial condition, and results of operations.

ITEM 1B – UNRESOLVED STAFF COMMENTS

None.

15





ITEM 2 – PROPERTIES

The Company’s properties with total square footage above one million, all of which are owned by the Company,
are detailed by the location, size, and focus of each facility as provided in the table below (amounts in thousands):
 
 
Approximate square footage
 
 
 
 
Location
 
Owned
 
 
Use
 
Segment
Volzhsky, Russia
 
2,153

 
 
Manufacturing, distribution
 
All segments
Union City, Tennessee
 
2,149

 
 
Manufacturing, distribution
 
All segments
Des Moines, Iowa
 
1,930

 
 
Manufacturing, distribution
 
All segments
Sao Paulo, Brazil
 
1,282

 
 
Manufacturing, distribution
 
All segments
Quincy, Illinois
 
1,205

 
 
Manufacturing, distribution
 
All segments
Freeport, Illinois
 
1,202

 
 
Manufacturing, distribution
 
All segments


The Company’s total properties by continent are detailed by the location, size, and focus as provided in the table below (amounts in thousands):
 
 
Approximate square footage
 
 
 
 
Location
 
Owned
 
Leased
 
Use
 
Segment
North America
 
8,596

 
535

 
Manufacturing, distribution
 
All segments
Europe
 
3,910

 
19

 
Manufacturing, distribution
 
All segments
South America
 
2,929

 
104

 
Manufacturing, distribution
 
All segments
Australia
 
 
 
1,205

 
Manufacturing, distribution
 
All segments
Asia
 
646

 
281

 
Manufacturing, distribution
 
All segments

The Company considers each of its facilities to be in good condition and adequate for present use.  Management believes that the Company has sufficient capacity to meet current market demand with the active facilities.   

ITEM 3 – LEGAL PROCEEDINGS

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. See Note 24 to the Company's consolidated financial statements in Part IV, Item 15 of this Form 10-K for further discussion.

ITEM 4 – MINE SAFETY DISCLOSURES

None.


16


PART II

ITEM 5
– MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock is traded on the New York Stock Exchange (NYSE) under the symbol TWI.  As of February 25, 2020, there were approximately 350 holders of record of Titan common stock.  

PERFORMANCE COMPARISON GRAPH
The performance graph below compares cumulative total return on the Company’s common stock over the past five years against the cumulative total return of the Standard & Poor’s 600 Agricultural & Farm Machinery Index, and against the Standard & Poor’s 500 Stock Index.  The graph depicts the value on December 31, 2019, of a $100 investment made on December 31, 2014, in Company common stock and each of the other two indices, with all dividends reinvested.  The stock price performance reflected below is based on historical results and is not necessarily indicative of future stock price performance.

The performance graph is not deemed to be “soliciting material” or to be “filed” with the SEC for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act) or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Titan under the Securities Act of 1933 or the Exchange Act.

chart-55d792f702f85947b31.jpg

 
Fiscal Year Ended December 31,
 
2014
 
2015
 
2016
 
2017
 
2018
 
2019
Titan International, Inc.
$
100.00

 
$
37.18

 
$
106.07

 
$
122.09

 
$
44.29

 
$
34.58

S&P 500 Index
100.00

 
101.38

 
113.51

 
138.29

 
132.23

 
173.86

S&P 600 Agricultural & Farm Machinery Index
100.00

 
94.38

 
129.33

 
153.70

 
123.57

 
119.70




17


ITEM 6 – SELECTED FINANCIAL DATA

The selected financial data presented below, as of and for the years ended December 31, 2019, 2018, 2017, 2016, and 2015, are derived from the Company’s consolidated financial statements, as audited by Grant Thornton LLP, an independent registered public accounting firm, for the years ended December 31, 2019, 2018, 2017, 2016, and 2015, and should be read in conjunction with the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations and our audited consolidated financial statements and notes thereto.
 
Year Ended December 31,
 (All amounts in thousands, except per share data)
2019
 
2018
 
2017
 
2016
 
2015
Net sales
$
1,448,666

 
$
1,602,408

 
$
1,468,922

 
$
1,265,497

 
$
1,394,771

Asset impairment and inventory write-down
—

 
—

 
9,917

 
—

 
—

Gross profit
129,004

 
198,266

 
160,311

 
141,415

 
136,583

(Loss) income from operations
(28,432
)
 
42,244

 
(11,151
)
 
(22,400
)
 
(25,505
)
Loss on senior note repurchase
—

 
—

 
(18,646
)
 
—

 
—

(Loss) income before income taxes
(48,044
)
 
19,807

 
(52,876
)
 
(36,474
)
 
(55,072
)
Net (loss) income
(51,519
)
 
13,045

 
(64,079
)
 
(39,755
)
 
(89,828
)
Net loss attributable to noncontrolling interests
(3,094
)
 
(3,042
)
 
(4,037
)
 
(2,150
)
 
(14,654
)
Net (loss) income attributable to Titan
(48,425
)
 
16,087

 
(60,042
)
 
(37,605
)
 
(75,174
)
Net (loss) income per share – basic
(0.84
)
 
.06

 
(1.12
)
 
(.87
)
 
(1.73
)
Net (loss) income per share – diluted
(0.84
)
 
.06

 
(1.12
)
 
(.87
)
 
(1.73
)
Dividends declared per common share
0.02

 
0.02

 
0.02

 
0.02

 
0.02


 
As of December 31,
(All amounts in thousands)
2019
 
2018
 
2017
 
2016
 
2015
Working capital, excluding cash
$
250,310

 
$
322,728

 
$
266,701

 
$
215,250

 
$
246,279

Current assets
644,262

 
779,481

 
783,193

 
729,181

 
716,564

Total assets
1,114,307

 
1,251,256

 
1,290,112

 
1,265,896

 
1,273,793

Long-term debt (a)
443,349

 
409,572

 
407,171

 
408,760

 
475,443

Total equity
238,988

 
270,097

 
310,084

 
292,879

 
351,246

(a)
Excludes amounts due within one year and classified as a current liability.



ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 the financial statements included in this annual report with a narrative from the perspective of the management of Titan International, Inc. (together with its subsidiaries, Titan, or the Company) on Titan’s financial condition, results of operations, liquidity, and other factors which may affect the Company’s future results. You should read the following discussion and analysis in conjunction with "Item 6. Selected Financial Data" and our consolidated financial statements and related notes in "Item 8. Financial Statements and Supplementary Data." The following discussion includes forward-looking statements about our business, financial condition, and results of operations, including discussions about management’s expectations for our business. These statements represent projections, beliefs, and expectations based on current circumstances and conditions and in light of recent events and trends, and you should not construe these statements either as assurances of performance or as promises of a given course of action. Instead, various known and unknown factors are likely to cause our actual performance and management’s actions to vary, and the results of these variances may be both material and adverse. See “Forward-Looking Statements” and "Item 1A. Risk Factors" in Part 1 of this Form 10-K.




18


BUSINESS
For a description of the Company’s business and segments see Part 1, Item 1 of this Form 10-K.


MARKET CONDITIONS AND OUTLOOK

AGRICULTURAL MARKET OUTLOOK
Agriculture-related commodity prices remain low as a result of ongoing tariffs and trade concerns. Within North America, concerns about current economic conditions coupled with extraordinarily bad weather in the spring of 2019 led farmers to be less inclined to make large investments in their farming equipment. In 2020, market conditions for North America and Europe are expected to remain soft while it is anticipated that Russia and Latin America will experience modest growth. Major OEMs are forecasting 2020 agricultural equipment sales to be generally flat in North America. Many variables, including weather, volatility in the price of commodities, grain prices, export markets, foreign currency exchange rates, government policies, subsidies, and the demand for used equipment can greatly impact the Company's performance in the agricultural market in a given period.

EARTHMOVING/CONSTRUCTION MARKET OUTLOOK
The earthmoving/construction market had a strong start in the beginning of 2019 but experienced declines during the rest of 2019 due to global economic uncertainty. Demand for larger construction equipment used for highways and infrastructure, which had been steady after several years of strong growth, began to tighten in 2019. Mining industry equipment demand also began to soften within certain regions in the second half of 2019. Construction is mainly driven by GDP by country and the need for infrastructure developments. We anticipate modest declines for small and medium-sized earthmoving/construction equipment used in the housing and commercial construction sectors in 2020. Mining is primarily driven by both the demand for and pricing of commodities. Demand for Titan's products in the mining industry for 2020 is anticipated to be generally flat as compared to 2019. The earthmoving/construction segment is affected by many variables, including commodity prices, road construction, infrastructure, government appropriations, housing starts, and other macroeconomic drivers.

CONSUMER MARKET OUTLOOK
The consumer market consists of several different distinct product lines within different regions. These products include light truck tires, turf equipment, specialty products, and train brakes. Overall, the Company expects modest growth within this market in 2020. The consumer segment is affected by many variables including consumer spending, interest rates, government policies, and other macroeconomic drivers.






19


SUMMARY OF RESULTS OF OPERATIONS

The following table sets forth the Company’s statement of operations expressed as a percentage of net sales for the periods indicated.  This table and subsequent discussions should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included elsewhere in this annual report.
 
As a Percentage of Net Sales
Year ended December 31,
 
2019
 
2018
 
2017
Net sales
100.0
 %
 
100.0
 %
 
100.0
 %
Cost of sales
91.1

 
87.6

 
88.4

Asset impairment
—

 
—

 
0.7

Gross profit
8.9

 
12.4

 
10.9

Selling, general and administrative expenses
9.5

 
8.4

 
10.3

Research and development
0.7

 
0.7

 
0.7

Royalty expense
0.7

 
0.7

 
0.7

(Loss) income from operations
(2.0
)
 
2.6

 
(0.8
)
Interest expense
(2.3
)
 
(1.9
)
 
(2.0
)
Loss on senior note repurchase
—

 
—

 
(1.3
)
Foreign exchange gain (loss)
0.3

 
(0.7
)
 
(0.1
)
Other income
0.7

 
1.2

 
0.6

(Loss) income before income taxes
(3.3
)
 
1.2

 
(3.6
)
Income tax provision
0.2

 
0.4

 
0.8

Net (loss) income
(3.5
)%
 
0.8
 %
 
(4.4
)%
Net loss attributable to noncontrolling interests
(0.2
)
 
(0.2
)
 
(0.3
)
Net (loss) income attributable to Titan
(3.3
)%
 
1.0
 %
 
(4.1
)%
 

In addition, the following table sets forth components of the Company’s net sales classified by segment:
 
(amounts in thousands)
2019
 
2018
 
2017
Agricultural
$
652,558

 
$
694,268

 
$
690,238

Earthmoving/construction
648,753

 
741,733

 
608,894

Consumer
147,355

 
166,407

 
169,790

Total
$
1,448,666

 
$
1,602,408

 
$
1,468,922




20


FISCAL YEAR ENDED DECEMBER 31, 2019, COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2018

RESULTS OF OPERATIONS
 
Highlights for the year ended December 31, 2019, compared to 2018 (amounts in thousands):
 
2019
 
2018
 
% Increase (Decrease)
Net sales
$
1,448,666

 
$
1,602,408

 
(9.6
)%
Cost of sales
1,319,662

 
1,404,142

 
(6
)%
Gross profit
129,004

 
198,266

 
(34.9
)%
Selling, general and administrative expenses
137,697

 
134,789

 
2.2
 %
Research and development expenses
9,859

 
11,146

 
(11.5
)%
Royalty expense
9,880

 
10,087

 
(2.1
)%
(Loss) income from operations
(28,432
)
 
42,244

 
167.3
 %

Net Sales
Net sales for the year ended December 31, 2019, were $1.45 billion, compared to $1.60 billion for the year ended December 31, 2018, a decrease of 9.6%, driven by sales decreases in all segments. This decrease reflects ongoing economic and weather challenges in the agricultural sector and a tightening of the construction market which significantly impacted our undercarriage business. Global trade issues were a major factor for the market challenges that were encountered. Overall, net sales volume was down 10.0% and unfavorable currency translation further decreased net sales by 3.4%. Favorable price/mix partially offset these declines and contributed a 3.8% increase in net sales.

Cost of Sales and Gross Profit
Cost of sales was $1.32 billion for the year ended December 31, 2019, compared to $1.40 billion for 2018. Gross profit for 2019 was $129.0 million, or 8.9% of net sales, compared to $198.3 million, or 12.4% of net sales, for 2018. The decrease in gross profit and margin was driven by lower sales volume, production inefficiencies and higher material costs, particularly in North American wheel operations relating to elevated steel inventories and related costs in the second and third quarters of 2019. The impact on 2019 costs and gross profit related to North American wheel operations was approximately $15 million versus 2018.

Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses for the year ended December 31, 2019, were $137.7 million, or 9.5% of net sales, up 2.2%, compared to $134.8 million, or 8.4% of net sales, for 2018.  The increase in SG&A expenses was primarily driven by an increase in technology expense in North America related to stabilization of the current ERP platform and investments in corporate systems. In addition, during 2019, the Company incurred approximately $2.7 million related to a postponed public listing of its subsidiary, ITM, which produces undercarriage products on a global scale. The increased costs were partially offset by lower bonus and sales commission expense.

Research and Development Expenses
Research and development (R&D) expenses for the year ended December 31, 2019, were $9.9 million, or 0.7% of net sales, compared to $11.1 million, or 0.7% of net sales, for 2018. The decrease in expenses was primarily attributable to lower salaries, benefits and facility costs due to more focused efforts in North America and undercarriage as compared to more significant product developments in 2018.

Royalty Expense
The Company has trademark license agreements with The Goodyear Tire & Rubber Company to manufacture and sell certain farm tires under the Goodyear name. These agreements cover sales in North America, Latin America, Europe, the Middle East, Africa, Russia, and other Commonwealth of Independent States countries. Each of these agreements is scheduled to expire in 2025. Royalty expenses for the year ended December 31, 2019, were $9.9 million, compared to $10.1 million for 2018.

(Loss) Income from Operations
Loss from operations for the year ended December 31, 2019, was $28.4 million, or 2.0% of net sales, compared to income of $42.2 million, or 2.6% of net sales, for 2018.  This decrease in income was primarily driven by lower net sales and the net result of the items previously discussed.


21




OTHER PROFIT/LOSS ITEMS

Interest Expense
Interest expense for 2019 and 2018 was $33.1 million and $30.5 million, respectively. The increase in interest expense was primarily due to increased borrowings under Titan's revolving credit facility and increased borrowing rates.

Foreign Exchange Gain (Loss)
Foreign currency gain was $4.0 million for the year ended December 31, 2019, compared to a loss of $11.2 million for the year ended December 31, 2018. Foreign currency gain or loss is the result of the translation of intercompany loans at certain foreign subsidiaries which are denominated in local currencies, not the reporting currency, the United States dollar. Since such loans are expected to be settled in cash at some point in the future, these loans are adjusted each reporting period to reflect the current exchange rates. Latin American, Australian, Canadian and Russian currencies all experienced significant fluctuations in 2019 as compared to 2018, which drove the Company's favorability in foreign currency translation. The Company uses derivative financial instruments from time to time on such intercompany loans as well as other actions to reduce foreign exchange exposures.

Other Income
Other income was $9.5 million for the year ended December 31, 2019, as compared to other income of $19.2 million for 2018, a decrease of $9.7 million. The decrease in 2019 was primarily attributable to 2018 non-recurring legal settlements of $9.9 million.

Provision for Income Taxes
The Company recorded tax expense for income taxes of $3.5 million and $6.8 million for the years ended December 31, 2019 and 2018, respectively. The Company's effective tax rate was (7)% in 2019 and 34% in 2018.

The Company’s 2019 and 2018 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of U.S. and certain foreign jurisdictions that incurred a full valuation allowance on deferred tax assets created by current year projected losses and a reduction of the liability for unrecognized tax positions. In addition, there were non-deductible royalty expenses and statutorily required income adjustments made in certain foreign jurisdictions that negatively impacted the tax rate for the years ended December 31, 2019 and 2018.

Net (Loss) Income
Net loss for the year ended December 31, 2019, was $51.5 million, compared to net income of $13.0 million for 2018. Basic earnings per share was $(0.84) for the year ended December 31, 2019, as compared to $0.06 for 2018. Diluted earnings per share was $(0.84) for the year ended December 31, 2019, as compared to $0.06 for 2018. The Company's lower net income and earnings per share were due to the items previously discussed.



SEGMENT INFORMATION

Segment Summary (Amounts in thousands)
2019
 
Agricultural
 
Earthmoving/
Construction
 
Consumer
 
Corporate/ Unallocated
 Expenses
 
Consolidated
 Totals
Net sales
 
$
652,558

 
$
648,753

 
$
147,355

 
$
—

 
$
1,448,666

Gross profit
 
55,971

 
57,678

 
15,355

 
—

 
129,004

(Loss) income from operations
 
10,991

 
(1,892
)
 
1,849

 
(39,380
)
 
(28,432
)
2018
 
 

 
 

 
 

 
 

 
 

Net sales
 
$
694,268

 
$
741,733

 
$
166,407

 
$
—

 
$
1,602,408

Gross profit
 
94,217

 
80,056

 
23,993

 
—

 
198,266

Income (loss) from operations
 
62,065

 
31,141

 
11,994

 
(62,956
)
 
42,244


22


Agricultural Segment Results
Agricultural segment results were as follows:
(Amounts in thousands)
2019
 
2018
 
% Decrease
Net sales
$
652,558

 
$
694,268

 
(6.0
)%
Gross profit
55,971

 
94,217

 
(40.6
)%
Income from operations
10,991

 
62,065

 
(82.3
)%

Net sales in the agricultural market were $652.6 million for the year ended December 31, 2019, as compared to $694.3 million for 2018, a decrease of 6.0%. Overall, a volume decrease of 13.2% and unfavorable foreign currency translation of 3.3% contributed to the decrease in net sales while favorable price/mix, experienced by all geographic locations except for Australia, partially offset this decrease with a 10.5% positive impact on net sales. Lower sales volumes were primarily caused by challenging market conditions and economic softness in most geographies as well as ongoing global trade issues. In addition, we experienced underperformance in our North American Wheel operations from reductions of steel inventory at higher than current prices, which compressed gross profit by approximately $12 million during the year. 

Gross profit in the agricultural market was $56.0 million, or 8.6% of net sales, for 2019, as compared to $94.2 million, or 13.6% of net sales, for 2018.   The decrease in gross profit was driven by lower sales volumes, unfavorable foreign currency translation and production inefficiencies. Income from operations in the agricultural market was $11.0 million for the year 2019, as compared to $62.1 million for 2018.  

 
Earthmoving/Construction Segment Results
Earthmoving/construction segment results were as follows:
(Amounts in thousands)
2019
 
2018
 
% Decrease
Net sales
$
648,753

 
$
741,733

 
(12.5
)%
Gross profit
57,678

 
80,056

 
(28.0
)%
(Loss) income from operations
(1,892
)
 
31,141

 
(106
)%

The Company's earthmoving/construction market net sales were $648.8 million for the year ended December 31, 2019, compared to $741.7 million for 2018, a decrease of 12.5%. The decrease in earthmoving/construction net sales was driven by decreased volume of 9.3% and unfavorable foreign currency translation of 3.3% of net sales. Price/mix was flat year over year. Lower sales volume was experienced in most geographies, except Latin America, and also a result of tightening within the construction market which was most impactful in our undercarriage business.

Gross profit in the earthmoving/construction market was $57.7 million, or 8.9% of net sales, for the year ended December 31, 2019, as compared to $80.1 million, or 10.8% of net sales, for ended December 31, 2018. The Company's earthmoving/construction market loss from operations was $1.9 million for the year 2019, as compared to income from operations of $31.1 million for 2018. The decrease in both gross profit and income from operations in 2019, compared to the same period in 2018, was primarily due to the lower sales volume and the unfavorable impact it had on production efficiencies, particularly in the European facilities that produce the Company's undercarriage products.

Consumer Segment Results
Consumer segment results were as follows:
(Amounts in thousands)
2019
 
2018
 
% Decrease
Net sales
$
147,355

 
$
166,407

 
(11.4
)%
Gross profit
15,355

 
23,993

 
(36.0
)%
Income from operations
1,849

 
11,994

 
(84.6
)%


23


Consumer market net sales were $147.4 million for the year ended December 31, 2019, compared to $166.4 million for 2018, a decrease of 11.4%.  The decrease in consumer net sales was primarily due to unfavorable price/mix of 7.6% and unfavorable foreign currency translation, primarily in Latin America, which negatively impacted net sales by 4.0%. Sales volumes were essentially flat with lower volume in Latin America and Russia offset by higher volumes in other geographies.

Gross profit from the consumer market was $15.4 million for 2019, or 10.4% of net sales, compared to $24.0 million, or 14.4% of net sales, for 2018. Consumer segment income from operations was $1.8 million for 2019, as compared to $12.0 million for 2018.

Corporate & Unallocated Expenses
Income from operations on a segment basis does not include corporate expenses which totaled $39.4 million for the year ended December 31, 2019, down 37.5% compared to $63.0 million for 2018. Corporate expenses, composed of selling, general and administrative expenses, of approximately $39.4 million and $63.0 million for the years ended December 31, 2019 and 2018, respectively. The decrease was due to lower salaries and benefits as well as an increase in allocations to the other segments as compared to the prior year.


FISCAL YEAR ENDED DECEMBER 31, 2018, COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 2017

The comparison of the 2018 results to 2017 has been omitted from this Form 10-K and can be found in the Company's Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on March 7, 2019.




LIQUIDITY AND CAPITAL RESOURCES

Cash Flows
As of December 31, 2019, the Company had $66.8 million of cash, a decrease of $14.9 million from December 31, 2018, due to the following items:


Operating Cash Flows
Summary of cash flows from operating activities:
(Amounts in thousands)
Year ended December 31,
 
 
 
2019
 
2018
 
Change
Net (loss) income
$
(51,519
)
 
$
13,045

 
$
(64,564
)
Depreciation and amortization
54,376

 
57,618

 
(3,242
)
Deferred income tax provision
(2,300
)
 
(2,291
)
 
(9
)
Accounts receivable
56,832

 
(36,092
)
 
92,924

Inventories
63,654

 
(77,919
)
 
141,573

Prepaid and other current assets
1,912

 
(5,377
)
 
7,289

Accounts payable
(53,183
)
 
29,364

 
(82,547
)
Other current liabilities
(10,155
)
 
(2,866
)
 
(7,289
)
Other liabilities
(5,438
)
 
(3,444
)
 
(1,994
)
Other operating activities
(8,737
)
 
(8,214
)
 
(523
)
Net cash provided by (used for) operating activities
$
45,442

 
$
(36,176
)
 
$
81,618

 
For the year ended December 31, 2019, operating activities provided cash of $45.4 million, driven by decreases in inventories and accounts receivable of $63.7 million and $56.8 million, respectively, partially offset by decreases from accounts payable of $53.2 million and liabilities of $15.6 million. Included in net loss of $51.5 million were non-cash charges for depreciation and amortization of $54.4 million.


24


Operating activity cash increased by $81.6 million when comparing 2019 to 2018. This dramatic improvement was due to liquidation of working capital as a result of company-wide initiatives surrounding inventory management partially offset by the impact of lower sales in 2019, which resulted in a decrease of $64.6 million in net income.

Summary of the components of cash conversion cycle:
 
December 31,

 
December 31,

 
2019
 
2018
Days sales outstanding
56

 
61

Days inventory outstanding
111

 
115

Days payable outstanding
(53
)
 
(62
)
Cash conversion cycle
114

 
114


Days inventory outstanding decreased by 4 days during 2019 from 2018 due to strategic inventory management. During 2019 and beyond, days inventory outstanding is expected to continue to decrease as a result of recently improved planning systems to ensure more accurate demand forecasting and strategic sourcing of raw materials.

Investing Cash Flows
Summary of cash flows from investing activities:
(Amounts in thousands)
Year ended December 31,
 
 
 
2019
 
2018
 
Change
Capital expenditures
$
(36,414
)
 
$
(39,000
)
 
$
2,586

Sale of Wheels India Limited shares
19,021

 
—

 
19,021

Payments related to redeemable noncontrolling interest
(71,722
)
 
—

 
(71,722
)
Other investing activities
(3,476
)
 
2,069

 
(5,545
)
Cash used for investing activities
$
(92,591
)
 
$
(36,931
)
 
$
(55,660
)
 
Net cash used for investing activities was $92.6 million in 2019, compared to cash used of $36.9 million in 2018. The Company invested a total of $36.4 million in capital expenditures in 2019, compared to $39.0 million in 2018. Capital expenditures represent various equipment purchases and improvements to enhance production capabilities of Titan’s existing business and maintain existing equipment. The Company made payments of $71.7 million in satisfaction of obligations relating to the settlement put option under the Shareholders' Agreement. See Note 13 for additional information. In September 2019, the Company sold shares of its investment in Wheels India Limited for $19.0 million.

Financing Cash Flows
Summary of cash flows from financing activities:
(Amounts in thousands)
Year ended December 31,
 
 
 
2019
 
2018
 
Change
Proceeds from borrowings
$
134,227

 
$
57,294

 
$
76,933

Payment on debt
(100,901
)
 
(38,557
)
 
(62,344
)
Dividends paid
(1,204
)
 
(1,201
)
 
(3
)
Cash provided by financing activities
$
32,122

 
$
17,536

 
$
14,586

 
Net cash provided by financing activities was $32.1 million in 2019 due to proceeds from borrowings of $134.2 million partially offset by debt payments of $100.9 million.

25


Debt Restrictions
The Company’s revolving credit facility (credit facility) and indenture relating to the 6.50% senior secured notes due 2023 contain various restrictions which include:
•
When remaining availability under the credit facility is less than 10% of the total commitment under the credit facility ($12.5 million as of December 31, 2019), the Company is required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 (calculated quarterly on a trailing four quarter basis);
•
Limits on dividends and repurchases of the Company’s stock;
•
Restrictions on the ability of the Company to make additional borrowings, or to consolidate, merge, or otherwise fundamentally change the ownership of the Company;
•
Limitations on investments, dispositions of assets, and guarantees of indebtedness; and
•
Other customary affirmative and negative covenants.
  
These restrictions could limit the Company’s ability to respond to market conditions, provide for unanticipated capital investments, raise additional debt or equity capital, pay dividends, or take advantage of business opportunities, including future acquisitions.

LIQUIDITY OUTLOOK
At December 31, 2019, the Company had $66.8 million of cash and cash equivalents. At December 31, 2019, under the Company's $125 million credit facility, there were borrowings of $36 million. Titan’s availability under this domestic facility may be less than $125 million as a result of any outstanding letters of credit and the balance of accounts receivable and inventory at certain of its domestic subsidiaries. At December 31, 2019, an outstanding letter of credit totaled $11.5 million and the remaining amount available under the revolving credit facility was $30.8 million, based upon eligible accounts receivable and inventory balances. The cash and cash equivalents balance of $66.8 million includes $60.6 million held in foreign countries. The Company's current plans do not demonstrate a need to repatriate the foreign amounts to fund U.S. operations due to focus on non-core asset sales and availability under the credit facility.

Capital expenditures for 2020 are forecasted to be approximately $35 million. These capital expenditures are anticipated to be used primarily to enhance the Company’s existing facilities and manufacturing capabilities and drive productivity gains.
Cash payments for interest are currently forecasted to be approximately $30 million in 2020, based on the Company's year-end 2019 debt balances and debt maturities.
  
In the near future, Titan may pursue sales of non-core or idle assets to generate cash flow and improve working capital. Going forward, the Company may seek to grow by making acquisitions which will depend on its ability to identify suitable acquisition candidates, negotiate acceptable terms for their acquisition, and finance those acquisitions.
 
Subject to the terms of the agreements governing Titan's outstanding indebtedness, the Company may finance future acquisitions with cash on hand, cash from operations, additional indebtedness, issuing additional equity securities, and divestitures.

Cash on hand, anticipated internal cash flows from operations, and utilization of remaining available borrowings are expected to provide sufficient liquidity for working capital needs, debt maturities, capital expenditures, and potential acquisitions. Potential divestitures are also a means to provide for future liquidity needs.


26


CONTRACTUAL OBLIGATIONS
The Company’s contractual obligations at December 31, 2019, consisted of the following (amounts in thousands):
 
 
Payments due by period
Contractual Obligations
 
Total
 
Less than  1 year
 
1-3 years
 
3-5 years
 
More than 5 years
6.50% senior secured notes due 2023
 
$
400,000

 
$
—

 
$
—

 
$
400,000

 
$
—

Other debt and capital leases
 
108,642

 
61,253

 
44,204

 
1,636

 
1,549

Interest expense (a)
 
107,002

 
30,379

 
52,790

 
23,833

 
—

Operating leases
 
28,487

 
8,244

 
11,261

 
5,399

 
3,583

Purchase obligations
 
22,731

 
17,853

 
4,610

 
268

 
—

Other long-term liabilities (b)
 
32,200

 
4,800

 
16,400

 
11,000

 
—

Total
 
$
699,062

 
$
122,529

 
$
129,265

 
$
442,136

 
$
5,132

(a)
Interest expense is estimated based on the Company’s year-end 2019 debt balances, maturities, and interest rates.  The estimates assume the credit facility borrowings are paid off during 2020.  The Company’s actual debt balances and interest rates may fluctuate in the future; therefore, actual interest payments may vary from those payments detailed in the above table.
(b)
Other long-term liabilities represent the Company’s estimated funding requirements for defined benefit pension plans. The Company’s liability for pensions is based on a number of assumptions, including discount rates, rates of return on investments, mortality rates, and other factors.  Certain of these assumptions are determined with the assistance of outside actuaries.  Assumptions are based on past experience and anticipated future trends and are subject to a number of risks and uncertainties and may lead to significantly different pension liability funding requirements.


OFF-BALANCE SHEET ARRANGEMENTS
As of December 31, 2019, the Company did not have any off-balance sheet arrangements (as defined in Item 303(a)(4) of Regulation S-K).

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Preparation of financial statements and related disclosures in compliance with accounting principles generally accepted in the United States of America requires the application of technical accounting rules and guidance, as well as the use of estimates.  The Company’s application of such rules and guidance involves assumptions that require difficult subjective judgments regarding many factors, which, in and of themselves, could materially impact the financial statements and disclosures.  A future change in the estimates, assumptions, or judgments applied in determining the following matters, among others, could have a material impact on future financial statements and disclosures.
 
Asset and Business Acquisitions
The allocation of purchase price for asset and business acquisitions requires management estimates and judgment as to expectations for future cash flows of the acquired assets and business and the allocation of those cash flows to identifiable intangible assets in determining the estimated fair value for purchase price allocations. If the actual results differ from the estimates and judgments used in determining the purchase price allocations, impairment losses could occur. To aid in establishing the value of any intangible assets at the time of acquisition, the Company typically engages a professional appraisal firm.

Inventories
Inventories are valued at the lower of cost or net realizable value. Net realizable value is estimated based on current selling prices. Inventory costs are calculated using the first in, first out (FIFO) method or average cost method. Estimated provisions are established for slow-moving and obsolete inventory.


27


Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and the respective tax basis of assets and liabilities.   Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply in the years the temporary differences are expected to be settled or realized. A valuation allowance is recorded for the portion of the deferred tax assets for which it is more likely than not that a tax benefit will not be realized. Management’s judgment is required to determine the provision for income taxes, deferred tax assets and liabilities, and valuation allowances against deferred tax assets.
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 in the United States and pension plans in several foreign countries.  For more information concerning these obligations, see Note 22 for additional information.
 
The effect of hypothetical changes to selected assumptions on the Company’s frozen pension benefit obligations would be as follows (amounts in thousands):
 
 
 
December 31, 2019
 
2020
Assumptions
Percentage
Change
 
Increase
(Decrease)
PBO (a)
 
Increase
(Decrease)
Equity
 
Increase
(Decrease)
Expense
Pension
 
 
 
 
 
 
 
   Discount rate
+/-5
 
$(5,015)/$5,472
 
$5,015/$(5,472)
 
$(227)/$259
   Expected return on assets
+/-5
 
 
 
 
 
$(385)/$385
 
(a)
Projected benefit obligation (PBO) for pension plans.
 
Product Warranties
The Company provides limited warranties on workmanship on its products in all market segments. The majority of the Company's products are subject to a limited warranty that ranges between less than one year and ten years, with certain product warranties being prorated after the first year. Actual warranty experience may differ from historical experience. The Company calculates an estimated warranty liability based on past warranty experience and the sales of products subject to that experience. The Company records warranty expense based on warranty payments made and changes to the estimated warranty liability. The Company's warranty liability was $14.3 million at December 31, 2019, and $16.3 million at December 31, 2018. The Company recorded warranty expense of $5.0 million for the year ended December 31, 2019, and $4.2 million for the year ended December 31, 2018. The Company's estimated warranty liability and expense increased primarily as the result of higher net sales of product with historical warranty experience.

Impairment of Long-Lived Assets
The Company reviews fixed assets to assess recoverability from future operations whenever events and circumstances indicate that the carrying values may not be recoverable. Factors that could result in an impairment review include, but are not limited to, a current period cash flow loss combined with a history of cash flow losses, current cash flows that may be insufficient to recover the investment in the property over the remaining useful life, or a projection that demonstrates continuing losses associated with the use of a long-lived asset, significant changes in the manner of use of the assets, or significant changes in business strategies. Impairment losses are recognized in operating results when expected undiscounted cash flows are less than the carrying value of the asset. Impairment losses are measured as the excess of the carrying value of the asset over the discounted expected future cash flows or the estimated fair value of the asset.













28


MARKET RISK

Foreign Currency Risk
The Company is exposed to the impact of foreign currency fluctuations in certain countries in which it operates. The exposure to foreign currency movements is limited in many countries because the operating revenues and expenses of the Company's various subsidiaries and business units are substantially in the local currency of the country in which they operate. To the extent that borrowings, sales, purchases, revenues, expenses or other transactions are not in the local currency of the subsidiary, the Company is exposed to currency risk and may enter into foreign exchange derivative contracts to mitigate the currency risk. The Company is exposed to fluctuations in the Australian dollar, Brazilian real, British pound, euro, Russian ruble and other global currencies.   The Company’s net investment in foreign entities translated into U.S. dollars was $287.0 million at December 31, 2019, and $347.1 million at December 31, 2018.  The hypothetical potential loss in value of the Company’s net investment in foreign entities resulting from a 10% adverse change in foreign currency exchange rates at December 31, 2019, would have been approximately $28.7 million.

Commodity Price Risk
The Company does not generally enter into long-term commodity pricing contracts and does not use derivative commodity instruments to hedge its exposures to commodity market price fluctuations.  Therefore, the Company is exposed to price fluctuations of its key commodities, which consist primarily of steel, natural rubber, synthetic rubber, and carbon black. The Company attempts to pass on certain material price increases and decreases to its customers, depending on market conditions.
 
Interest Rate Risk
The Company is exposed to interest rate risk on its variable debt. The Company has a $125 million credit facility that has a variable interest rate.  As of December 31, 2019, the amount available under the credit facility was $30.8 million. If the credit facility were fully drawn to available funds, a change in the interest rate of 100 basis points, or 1%, would have changed the Company’s interest expense by approximately $0.8 million.  At December 31, 2019, there were $36.0 borrowings under the credit facility.


ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to Part II, Item 7 of this report.

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Reference is made to Part IV, Item 15 of this report, “Exhibits and Financial Statement Schedules.”
 
ITEM 9
– CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
Titan management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of December 31, 2019. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2019, Titan's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by Titan in the reports that it files or submits under the Exchange Act are recorded, processed, summarized, and reported accurately and within the time frames specified in the SEC's rules and forms and accumulated and communicated to Titan management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
 
Changes in Internal Control over Financial Reporting
There were no changes in Titan's internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fourth quarter of fiscal 2019 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

29


Management's Report on Internal Control over Financial Reporting
Titan management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States. Internal control over financial reporting includes those policies, procedures, and activities that:
•
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company;
•
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
•
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.
Titan management, including the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the "Internal Control-Integrated Framework (2013)." Based on this assessment, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2019.
The effectiveness of Titan's internal control over financial reporting as of December 31, 2019, has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report within this Form 10-K.
Inherent Limitations on the Effectiveness of Controls
Because of its inherent limitations, the Company's disclosure controls and procedures or internal controls over financial reporting may not prevent or detect all misstatements or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in a cost-effective control system, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
   
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur due to simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


ITEM 9B – OTHER INFORMATION

None.

30


PART III

ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Directors
Information required by this item regarding the Company’s directors is incorporated herein by reference to the Company’s 2020 Proxy Statement under the captions “Proposal #1 - Election of Directors,” “Committees of the Board of Directors; Meetings” and “Corporate Governance.”

Executive Officers
The names, ages, and positions of all executive officers of the Company are listed below, followed by a brief account of their business experience during the past five years.  Officers are normally appointed annually by the Board of Directors at a meeting immediately following the Annual Meeting of Stockholders.  There is no arrangement or understanding between any officer and any other person pursuant to which an officer was selected.

Paul G. Reitz, 47, joined the Company in July 2010 as Chief Financial Officer.  Mr. Reitz was appointed President in February 2014. In December 2016, Mr. Reitz was appointed President and Chief Executive Officer.

David A. Martin, 52, joined the Company in June 2018 as Chief Financial Officer. Prior to joining Titan, Mr. Martin served from 1993 to 2018 in various roles at Aegion Corporation, a global technology/service provider maintaining, protecting and strengthening infrastructure, primarily pipelines, that is listed on the NASDAQ Global Select Market. Mr. Martin’s roles included Chief Financial Officer from 2007 to November 2017.

Michael G. Troyanovich, 62, joined the Company in August 2011 as Assistant General Counsel. Mr. Troyanovich was appointed Secretary in December 2012, and General Counsel in June 2013.

Business Conduct Policy
The Company adopted a business conduct policy, which is applicable to directors, officers and employees.  The Company has also adopted corporate governance guidelines.  The business conduct policy and corporate governance guidelines are available under the investor information category of the Company’s website, www.titan-intl.com.  The Company intends to satisfy disclosure requirements regarding amendments to or waivers from its business conduct policy by posting such information on its website.  Printed copies of the business conduct policy and corporate governance guidelines are available, without charge, by writing to:  Titan International, Inc., c/o Corporate Secretary, 2701 Spruce Street, Quincy, IL 62301.
 
ITEM 11 – EXECUTIVE COMPENSATION

Information required by this item regarding executive compensation is incorporated herein by reference to the Company’s 2020 Proxy Statement under the caption “Compensation of Executive Officers.”


ITEM 12– SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this item regarding security ownership is incorporated herein by reference to the Company’s 2020 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management.”


ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information required by this item regarding relationships and related party transactions is incorporated herein by reference to the Company’s 2020 Proxy Statement under the captions “Certain Relationships and Related Party Transactions” and “Corporate Governance” and also appears in Note 27 of the Company’s Notes to Consolidated Financial Statements.

ITEM 14 – PRINCIPAL ACCOUNTING FEES AND SERVICES
Information required by this item regarding audit fees and services is incorporated by reference herein to the Company’s 2020 Proxy Statement under the caption “Audit and Other Fees.”

31



PART IV

ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)  1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.
 
 
 
 
 
 
 
 
3.
 

The accompanying Exhibit Index is incorporated herein by reference.


32


TITAN INTERNATIONAL, INC.
Exhibit Index
Annual Report on Form 10-K
Exhibit No.
DESCRIPTION
3.1 (a)
3.2 (a)
4.1 *
4.2 (b)
4.3 (b)
10.1 (c)
10.2 (d)
10.3 (e)
10.4 (f)
10.5 (g)
10.6 (h)
10.7 (i)
10.8 (j)
10.9 (k)
10.10 (l)
10.11 (m)
10.12 (n)
10.13 (o)
10.14 (p)
21*
31.1*
31.2*
32*
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Filed herewith
** Confidential treatment has been granted with respect to certain portions of this exhibit.  Omitted portions have been filed separately with the Securities and Exchange Commission.

(a)
Incorporated by reference to the same numbered exhibit contained in the Company’s Current Report on Form 8-K filed on June 29, 2015 (No. 1-12936).

33


(b)
Incorporated by reference to the same numbered exhibit contained in the Company’s Current Report on Form 8-K filed on November 20, 2017 (No. 1-12936).
(c)
Incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement filed on March 28, 2011.
(d)
Incorporated by reference to exhibit 10.1 contained in the Company's Current Report on Form 8-K filed on December 23, 2015 (No. 1-12936).
(e)
Incorporated by reference to exhibit 10.3 contained in the Company's Current Report on Form 8-K filed on December 9, 2016 (No. 1-12936).
(f)
Incorporated by reference to exhibit 10.3 contained in the Company's Current Report on Form 8-K filed on December 23, 2015 (No. 1-12936).
(g)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on June 15, 2018 (No. 1-12936).
(h)
Incorporated by reference to exhibit 10.1 contained in the Company's Form 10-Q for the quarterly period ended March 31, 2016 (No. 1-12936).
(i)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on February 29, 2016 (No. 1-12936).
(j)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on October 3, 2016 (No. 1-12936).
(k)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on February 23, 2017 (No. 1-12936).
(l)
Incorporated by reference to exhibit 10 contained in the Company's Form 10-Q for the quarterly period ended September 30, 2018 (No. 1-12936).
(m)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on February 11, 2019 (No 1-12936).
(n)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on February 25, 2019 (No 1-12936).
(o)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 8-K filed on May 21, 2019 (No 1-12936).
(p)
Incorporated by reference to exhibit 10 contained in the Company's Current Report on Form 10-Q for the quarterly period ended September 30, 2019 (No 1-12936).


ITEM 16 – FORM 10-K SUMMARY

None.




34


SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
TITAN INTERNATIONAL, INC.
 
(Registrant)


Date:  
March 3, 2020
By:  
/s/  PAUL G. REITZ
 
 
 
Paul G. Reitz
 
 
 
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 3, 2020.

Signatures
Capacity
 
 
 
 
/s/  PAUL G. REITZ
President, Chief Executive