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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K

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

FOR THE FISCAL YEAR ENDED JANUARY 31, 2011

Commission File No. 000-1409171

TITAN MACHINERY INC.(Exact name of registrant as specified in its charter)

Delaware(State or Other Jurisdiction of
Incorporation or Organization)

No. 45-0357838(IRS Employer Identification No.)644 East Beaton Drive
West Fargo, ND 58078-2648(Address of Principal Executive Offices)


(701) 356-0130(Registrant's telephone number, including area code)

Securities
registered pursuant to Section 12(b) of the Act:

Title
of each class:Common Stock, $0.00001 Par Value

Name
of each exchange on which registered:The NASDAQ Global Select Market

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 in Rule 405 of the Securities Act. Yes
o No ý

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
o No ý

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 for 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 ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a
smaller reporting company)

Smaller reporting company o


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

The aggregate market value of our common stock held by non-affiliates as of July 31, 2010 was approximately $187.1 million (based on the
last sale price of $14.27 per share on such date as reported on The NASDAQ Global Select Market).

The
number of shares outstanding of the registrant's common stock as of March 31, 2011 was 17,922,193 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the registrant's 2011 Annual Meeting of Stockholders are incorporated by reference into Items 10, 11, 12, 13 and 14 of
Part III of this report.



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Page No.PART IItem 1.

Business


1Item 1A.

Risk Factors


17Item 1B.

Unresolved Staff Comments


23Item 2.

Properties


23Item 3.

Legal Proceedings


26Item 4.

(Removed and Reserved)


26PART IIItem 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


27Item 6.

Selected Financial Data


29Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations


31Item 7A.

Quantitative and Qualitative Disclosures About Market Risk


54Item 8.

Financial Statements and Supplementary Data


55Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure


90Item 9A.

Controls and Procedures


90Item 9B.

Other Information


90PART IIIItem 10.

Directors, Executive Officers and Corporate Governance


91Item 11.

Executive Compensation


91Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


91Item 13.

Certain Relationships and Related Transactions, and Director Independence


91Item 14.

Principal Accounting Fees and Services


91PART IVItem 15.

Exhibits, Financial Statement Schedules


91


We
make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act on our web site, http://www.titanmachinery.com, as soon as
reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC. We are
not including the information on our web site as a part of, or incorporating it by reference into, our Form 10-K.

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ITEM 1.    BUSINESS

Our Company

Overview

We own and operate a network of full service agricultural and construction equipment stores in the United States. Based upon
information provided to us by CNH Global N.V. or its U.S. subsidiary CNH America LLC, collectively referred to in this Form 10-K as CNH, we are the world's largest retail dealer of
Case IH Agriculture equipment and a major retail dealer of New Holland Agriculture, Case Construction and New Holland Construction equipment in the U.S. We have two primary business segments,
Agriculture and Construction, within each of which we sell and rent new and used equipment, sell parts, and service the equipment in the areas surrounding our stores.

The
agricultural equipment we sell and service includes machinery and attachments for uses ranging from large-scale farming to home and garden use. The construction equipment we sell and
service includes heavy construction and light industrial machinery for commercial and residential construction, road and highway construction and mining. Within each of our operating segments, we
engage in four principal business activities:



The
new equipment and parts we sell are supplied primarily by CNH. CNH is a leading manufacturer and supplier of agricultural and construction equipment, primarily through the Case IH
Agriculture, New Holland Agriculture, Case Construction and New Holland Construction brands. We acquire used equipment for resale through trade-ins from our customers and selective
purchases. We also sell parts and provide in-store and on-site repair and maintenance
services. We also rent equipment and provide other ancillary services such as equipment transportation, Global Positioning System ("GPS") signal subscriptions and finance and insurance products.

We
offer our customers a one-stop solution by providing equipment and parts sales, repair and maintenance services and rental functions in each store. Our full service
approach provides us with multiple points of customer contact and substantial cross-selling opportunities. We believe our mix of equipment and recurring parts and service sales enables us to operate
effectively throughout economic cycles. We also believe our significant scale, superior customer service, diverse and stable customer base, proven management reporting system and experienced
management team provide us with a competitive advantage in many of our local markets.

Throughout
our 31-year operating history we have built an extensive, geographically contiguous network of 81 stores, including two outlet stores. Our agricultural
equipment stores are located in highly productive farming regions, including the Red River valley in eastern North Dakota and northwestern Minnesota, the western portions of the corn belt in Iowa,
eastern South Dakota and southern Minnesota, and along the Interstate-80 corridor in Nebraska, which sits on top of the Ogallala Aquifer. Our construction equipment stores are located in
North Dakota, South Dakota, Iowa, Montana, Wyoming, eastern Nebraska and western Minnesota.

Our
executives have extensive industry experience. David Meyer, our Chairman and Chief Executive Officer, founded our company in 1980. In 2002, we acquired two stores owned by
C.I. Farm Power, Inc., a business owned by our President and Chief Operating Officer, Peter Christianson, which he co-founded in 1988. Based on our collective industry experience,
we developed the Titan Operating Model, which combines management accountability and decision-making at the store level with

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centralized,
back-office support. In addition, our executives work closely with our store managers to develop the managers' industry knowledge and ensure these managers achieve operational
excellence in line with our management philosophy.

We
have a history of successful growth through acquisitions. Since January 1, 2003, we have completed 34 acquisitions consisting of 75 stores operating in seven states,
including 19 acquisitions consisting of 44 stores completed since our initial public offering on December 11, 2007. We have a well-established track record of successfully
integrating acquired stores through the Titan Operating Model, retaining acquired-store employees and maintaining acquired-store customer relationships. We expect that acquisitions will continue to be
an important component of our consolidated and segment growth.

Industry Overview

Agricultural Equipment Industry

Agricultural equipment is purchased primarily for the production of food, fiber, feed grain and renewable energy. It is also purchased
for home and garden applications and maintenance of commercial, residential and government properties. Deere & Company, CNH and AGCO Corporation are the largest global manufacturers and supply
a full line of equipment and parts that address the primary machinery requirements of farmers. For the most recent fiscal year-ends for which information is currently available, revenue
from agriculture operations was $19.9 billion for Deere & Company, $11.5 billion for CNH and $6.9 billion for AGCO. In addition to the major manufacturers, several
short-line manufacturers produce specialized equipment that addresses regional and niche requirements of farmers. Agricultural equipment manufacturers typically grant dealers in the U.S.
authorized store locations, not exclusive territories, to distribute their products.

We
believe there are many factors that influence demand for agricultural equipment, parts and repair and maintenance services, including commodity prices, interest rates, general
economic conditions and weather. Conditions can fluctuate drastically in a short time period, creating volatility in demand, especially for equipment, in a given year. Government subsidies also
influence demand for agricultural equipment. Legislation, most notably the U.S. Farm Bill and the Farm Security and Rural Investment Act of 2002, attempts to stabilize the agriculture industry through
U.S. Department of Agriculture ("USDA") subsidies. USDA subsidies include (i) commodity programs consisting of direct, counter-cyclical and price support payments to farmers;
(ii) conservation programs; and (iii) disaster relief programs. We believe USDA subsidies reduce financial volatility and help ensure that farmers operate their farms and equipment
during economic down cycles, thus stabilizing demand for equipment, replacement parts and repair and maintenance services.

Construction Equipment Industry

Construction equipment is purchased primarily for commercial, residential and infrastructure construction, as well as for demolition,
maintenance, mining, energy production and forestry operations. The market for construction equipment is larger than the market for agricultural equipment and is segmented across multiple categories
including earth moving, lifting, light industrial, asphalt and paving, and concrete and aggregate equipment. We believe Caterpillar Inc., Komatsu Ltd.,
Deere & Company, CNH and Ingersoll-Rand Co. Ltd. are the largest global manufacturers of construction equipment. These companies generated revenue from their construction operations
of $39.9 billion for Caterpillar Inc., $15.4 billion for Komatsu Ltd., $3.7 billion for Deere & Company, and $2.9 billion for CNH for the most recent fiscal
year-ends for which information is currently available. As in the agricultural equipment market, distribution of construction equipment in the U.S. is executed primarily by manufacturer
authorized dealers; however, manufacturers' dealership agreements in the construction industry typically assign exclusive distribution territories.

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Construction
machinery is generally divided into heavy and light subgroups. Heavy machinery includes large wheel loaders, large tracked excavators, cranes, crawler dozers, motor graders
and articulated haul trucks. Light machinery includes backhoe landscape tractors, forklifts, compact excavators and skid steers. Heavy machinery is generally purchased by construction companies,
municipalities, local governments, rental fleet owners, quarrying and mining companies, waste management companies and forestry-related organizations. Typically, light machinery is purchased by
contractors, rental fleet owners, landscapers, logistics companies, farmers and recreational users. Although demand for construction equipment is affected by weather and seasonal factors, it is
usually less susceptible to seasonal changes than the agricultural equipment industry.

CNH
and industry reports show demand for construction equipment in our markets is driven by several factors, one of which is public infrastructure spending, including roads and highways,
sewer and water, as well as by public and private expenditures for the energy and mining industries. Demand for construction equipment is also driven by demand for fossil fuels, as well as metals and
other commodities. We expect to benefit from the need for equipment to establish the infrastructure necessary to extract these natural resources, particularly in North Dakota, as consumer and
wholesale consumption accelerates.

Titan Operating Model

We believe the Titan Operating Model is a key element to our continued success. Through the Titan Operating Model, we empower
leadership and share best practices at the store level while realizing efficiencies at the corporate level. We believe exceptional customer service is most efficiently delivered through accountable
store employees who are supported by centralized administrative, finance and marketing functions. By managing our business as a network of independent stores supported by a centralized, shared
resources group, we ensure coordination of the entire enterprise while promoting local business relationships on a store-by-store basis. We have implemented the Titan Operating
Model in each of our reporting segments.

Strong Stores

Each of our stores is run by a store manager who is reviewed and compensated based on the store's achievement of revenue,
profitability, market share and balance sheet objectives. Also, each store is typically staffed by a parts manager, a service manager and field marketers, all of whom report directly to the store
manager. Under our operating model, decision-making for customer-related issues is decentralized, with each store manager responsible for matters such as the type of equipment to stock, equipment
pricing, customer credit approvals, staffing levels and customer satisfaction. This operating model enables each store manager to concentrate on customers' equipment, parts and service needs, while
our shared resources group manages the administrative functions of the store. We believe customers in our industry view store managers and sales and service personnel as important partners in
operating their businesses. Therefore, we believe developing and supporting strong store managers enables us to grow same-store sales through fostering new relationships and further
developing existing relationships with our customers. In addition, we believe that choosing to centralize customer-related decision making at the corporate level risks undermining the partnership many
customers seek to build with their dealer.

Shared Resources

Our shared resources group provides a range of services to support our stores, including warranty and service administration,
information technology support, administration, marketing campaigns, human resources management, finance and insurance, central purchasing, accounting, data administration and cash management. We
believe these functions can be run more efficiently when combined and provide more sophisticated tools to our store managers than an independent dealership

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could
support alone. We maintain accountability through our management reporting systems, which provide data on certain key operational and financial metrics on a daily basis, as well as a
comprehensive review of financial performance on a monthly basis. We believe the services provided by our shared resources group enables our stores to achieve a higher level of customer service by
freeing them from certain general and administrative functions and a more competitive market presence at a lower cost than would be feasible if our stores operated independently. Furthermore, as we
acquire new stores, we believe the shared services required to support these stores will grow at a lower rate than our overall growth in store count.

Management Development and Succession Planning

Our executives work closely with our regional and store managers and mid-level corporate managers to ensure the managers
benefit from our executives' industry knowledge and execute operational excellence in line with our management philosophy. We also conduct formal meetings on a monthly basis with our store managers
and regional managers to assess operational and financial objectives, develop near-term strategies and share best practices across the organization. We believe the relationships between
our executives, regional managers, store managers and mid-level corporate managers will sustain our financial success through continued implementation of our effective operating model, by
providing a strong pool of capable successors to our current team of executives, regional managers and store managers. Further, we seek to staff our stores with entrepreneurial individuals trained,
including through our programs, and motivated to progress to higher level management positions. In addition, we sponsor programs with several technical colleges and community colleges that offer
scholarships to students who will ultimately work for us in various capacities empowered with the basic knowledge and tools to succeed.

Business Strengths

In addition to the Titan Operating Model, we believe the following attributes of our business model and market position are important
factors in our ability to compete effectively and achieve our long-term financial objectives:

Leading North American Equipment Provider with Significant Scale

According to CNH, we are the world's largest retail dealer of Case IH Agriculture equipment and a major retail dealer of New Holland
Agriculture, Case Construction and New Holland Construction equipment in the U.S. We believe our size and large, contiguous geographic market provide us with several competitive advantages
including:



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Customer Focus at the Local Level

As part of the Titan Operating Model, we centralize general and administrative functions and finance resources. This strategy enables
our store employees to focus exclusively on customers and eliminates redundant operating expenses. We also centralize our marketing resources to offer our stores and field marketers professional
marketing support that includes targeted direct mailings, advertising with targeted local media outlets, participation in and sponsorship of trade shows and industry events, our Titan Trader monthly
magazine, and our hosting of open houses, service clinics, equipment demonstrations, product showcases and customer appreciation outings. We believe this operating structure, which focuses on serving
our customers on a local level, will allow us to increase market share.

Superior Customer Service to Attract and Retain Customers

We believe our ability to respond quickly to our customers' demands is a key to profitable growth. Our executives are committed to
maintaining a customer-focused culture. We spend significant time and resources training our employees to effectively service our customers in each of our local markets, which we believe will increase
our revenue. Our training program involves active participation in all manufacturer-sponsored training programs and the use of industry experts as consultants for customized training programs and a
training team to assist in the integration of
newly-acquired operations. We also partner with several technical colleges to sponsor students that we plan to ultimately employ. In particular, the following capabilities enable us to better service
our customers:



Unique Entrepreneurial Culture to Attract and Retain Superior Employees

We created a unique entrepreneurial culture that empowers our employees to make decisions and act within the parameters of a proven
operating process and system. We believe this culture and our size gives us a competitive advantage in attracting and retaining the best employees in our industry. We developed an operating system and
process that provides our employees with defined objectives and frequent feedback of results within an entrepreneurial environment that allows them to work independently yet consistently throughout
our company. Through this operating system and process we have established defined financial metrics on a balanced scorecard, which is used monthly with each store manager to assess performance. Each
store manager is empowered to operate the individual store as appropriate within the guidelines set by the operating system and process. This balanced management philosophy enables our employees to
understand clearly how they succeed in our organization and how to interact with customers who expect a level of autonomy from our employees. Our compensation system focuses on rewarding our employees
for high performance, thus enabling us to retain most of those employees who perform at or above expectations. This system also enables us to attract talented individuals outside of our industry and
train them to perform at a high level within a relatively short period of time.

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Diverse and Stable Customer Base to Avoid Market Volatility

We believe our large and diverse customer base limits our exposure to risks associated with customer concentration and fluctuations in
local market conditions. We have long and stable relationships with many of our customers. During fiscal 2011, we conducted business with approximately 64,000 customers, none of whom accounted for
more than 1.0% of our total revenue. Our top ten customers combined represented approximately 3.9% of our total revenue.

Proven Information Technology Systems

Our management reporting systems provide the data and reports that facilitate our ability to make informed decisions. We use these
systems to actively manage our business and enable each store to access the available inventory of our other stores before ordering additional parts or equipment from our suppliers. As a result, we
minimize our investment in inventory while promptly satisfying our customers' parts and equipment needs. Our customer relationship management system provides sales and customer information and other
organizational tools to assist our field marketers, parts managers and service managers. In addition, our management reporting systems facilitate training and foster development of management
personnel.

Experienced Management Team to Implement our Growth Strategy

Our executive team is led by David Meyer, our Chairman and Chief Executive Officer, and Peter Christianson, our President and Chief
Operating Officer, who have approximately 36 and 32 years, respectively, of industry experience. Our regional managers, store managers and field marketers also have extensive knowledge and
experience in our industry. In addition, we compensate, develop and review our regional managers and store managers based on an approach that aligns their incentives with the goals and objectives of
our company, including achievement of revenue, profitability, market share and balance sheet objectives. We believe the strength of our management team will help our success in the marketplace.

Growth Strategy

We pursue the following growth strategies:

Increase Market Share and Same-Store Sales

We focus on increasing our share of the equipment sold in our markets because our market share impacts current period revenue and
compounds our revenue over the life of the equipment sold through recurring parts and service business. We seek to generate same-store growth and increase market share
through:



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Make Selective Acquisitions

The agricultural and construction equipment industries are fragmented and consist of many relatively small, independent businesses
servicing discrete local markets. We believe a favorable climate for dealership consolidation exists due to several factors, including the competitiveness of our industry, growing dealer
capitalization requirements and lack of succession alternatives. We intend to continue to evaluate and pursue acquisitions with the objectives of entering new markets, consolidating distribution
within our established network and strengthening our competitive position.

We
have a track record of completing and integrating acquisitions and have successfully used acquisitions to enter new markets. We look to add stores through acquisitions that offer
attractive growth opportunities, high demand for the equipment we sell and services we offer, management strength, and contiguity with our existing geography. These factors have guided us to
successful acquisition candidates. We believe our track record of successful acquisitions and expansion increases the probability that our future expansion will be profitable.

We
believe that we are effectively able to identify attractive acquisition candidates due to our leadership position in the industry, our track record of completing and integrating
acquisitions, and our contacts in and knowledge of our industry and geographic region. We regularly assess the acquisition landscape, evaluating potential acquisition candidates in terms of their
availability and desirability to our long-term growth strategy. In addition, we believe acquisition economics in our industry have been and will continue to be conducive to executing our
long-term growth strategy. Typically, we acquire only the fixed assets, working capital and selected inventory we believe are necessary to run an efficient store based on the Titan
Operating Model and assume only the liabilities related to financing the inventory and working capital acquired, although we sometimes acquire all the stock of a company. We, therefore, typically
calculate our net purchase price of an acquisition as the value paid for the assets acquired less the amount of any liabilities assumed. Upon completion of an acquisition we seek to
re-finance the inventory acquired according to the parts and floorplan financing parameters of the Titan Operating Model. We believe our management team's experience in evaluating
potential acquisition candidates helps them determine whether a particular dealership can be successfully integrated into our existing operations and enables them to structure mutually beneficial
purchase terms.

The
consent of CNH is required to acquire any CNH dealership, and the consent of the group of banks led by Wells Fargo Bank, National Association (the "Wells Fargo Bank Syndicate") is
required for the acquisition of dealerships meeting certain thresholds or other criteria defined in our Senior Secured Credit Facility (the "Credit Agreement").

The
table below summarizes our acquisition of 34 dealers, totaling 75 stores, since January 1, 2003. Certain stores (designated with an *) are included in the Agriculture segment
but also sell some construction equipment. See Item 2 for a listing of our current store locations.

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Agriculture Segment

Acquired Dealer

Location of StoresTitan Machinery, LLC January 2003

Watertown, South Dakota
Wahpeton, North Dakota
Casselton, North Dakota
Fargo, North DakotaConsolidated Ag Service, Inc. February 2004

Graceville, Minnesota
Marshall, Minnesota*
Pipestone, MinnesotaSmith International, Inc. March 2005

Waverly, IowaH.C. Clark Implement Co., Inc. May 2005

Aberdeen, South Dakota*Vern Anderson, Inc. November 2005

Anthon, Iowa
Cherokee, Iowa
Kingsley, Iowa
Le Mars, IowaWalterman Implement, Inc. November 2005

Dike, IowaFarm Power, Inc. of Minnesota and related entities March 2006

Elbow Lake, Minnesota
Fergus Falls, MinnesotaRichland County Implement, Inc. February 2007

Wahpeton, North DakotaAberdeen Equipment Co., Huron Equipment Co. and
Redfield Equipment Co. April 2007

Aberdeen, South Dakota*
Huron, South Dakota
Redfield, South DakotaRed Power International, Inc. August 2007

Ada, Minnesota
Crookston, Minnesota*Twin City Implement, Inc. November 2007

Mandan, North Dakota*Reiten & Young International, Inc. December 2007

Grand Forks, North Dakota*Avoca Operations, Inc. and Greenfield Operations, Inc. January 2008

Avoca, Iowa
Greenfield, IowaCeres Equipment Inc. February 2008

Roseau, MinnesotaQuad County Implement, Inc. May 2008

Blairstown, Iowa


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Acquired Dealer

Location of StoresWolf's Farm Equipment, Inc. September 2008

Kintyre, North DakotaPioneer Garage, Inc. October 2008

Pierre, South Dakota
Highmore, South Dakota
Miller, South DakotaAnderson Power and Equipment, Inc. December 2008

Thief River Falls, MinnesotaWinger Implement, Inc. May 2009

Winger, MinnesotaArthur Mercantile Company May 2009

Arthur, North DakotaValley Equipment, Inc. June 2009

Mayville, North DakotaLickness Bros. Implement Co. August 2009

Britton, South DakotaOskaloosa Implement Co. November 2009

Pella, Iowa
Oskaloosa, IowaValley Farm Equipment, Inc. November 2009

Milbank, South DakotaHubbard Implement, Inc. June 2010

Iowa Falls, IowaFairbanks International Inc. December 2010

Grand Island, Nebraska
Kearney, Nebraska
Lexington, Nebraska
Holdrege, Nebraska
Hastings, Nebraska
North Platte, NebraskaTri-State Implement, Inc. February 2011

Sioux Falls, South DakotaSchoffman's, Inc. March 2011

Redwood Falls, Minnesota


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Construction Segment

Acquired Dealer

Location of StoresKrider Equipment Co., Inc. January 2003

Fargo, North Dakota
Bismarck, North DakotaFargo Tractor & Equipment, Inc. January 2003

West Fargo, North DakotaPiorier Equipment Company, Inc. and related entities June 2006

Sioux City, Iowa
Marshall, Minnesota
Rapid City, South Dakota
Sioux Falls, South DakotaMid-Land Equipment Company, L.C. May 2008

Des Moines, Iowa
Davenport, Iowa
Clear Lake, Iowa
Cedar Rapids, Iowa
Omaha, Nebraska
Lincoln, NebraskaWestern Plains Machinery Co. and WP Rentals LLC December 2008

Billings, Montana (2 stores)
Belgrade, Montana
Great Falls, Montana
Missoula, Montana
Columbia Falls, Montana
Cheyenne, Wyoming
Casper, Wyoming
Gillette, WyomingABC Rental & Equipment Sales April 2011

Williston, North Dakota
Bozeman, Montana
Missoula, Montana
Big Sky, Montana


Integrate New Dealers into the Titan Operating Model

We have developed the Titan Operating Model to optimize the performance and profitability of each of our stores. Upon consummation of
each acquisition, we integrate acquired stores into our operations by implementing the Titan Operating Model to enhance each acquired store's performance within its target market. We generally
complete integration of a store within 18 months, although it may take several years before acquired stores fully realize the benefits of the Titan Operating Model. We believe the Titan
Operating Model provides us with multiple points of customer contact, creates cross-selling opportunities, fosters strong customer relationships and supports a culture of individual accountability
that increases our revenue and provides a strong platform for future growth.

Suppliers

CNHCase IH Agriculture, Case Construction, New Holland Agriculture and New Holland Construction

We have a longstanding relationship with CNH and, according to CNH, are the world's largest retail dealer of Case IH Agriculture
equipment. We have been an authorized dealer of Case agricultural equipment since our inception in 1980 and added the other CNH brands as Case grew, acquired other brands and merged with New Holland
in 1999 to form CNH. CNH supplied, through CNH America LLC, CNH's U.S. manufacturing entity, approximately 82.5% of the new agricultural equipment and 71.3% of the new construction equipment we
sold in fiscal 2011.

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CNH
is a global leader in the agricultural and construction equipment industries based on the number of units sold. In 2010, CNH had $15.6 billion in worldwide revenue, with
agricultural equipment accounting for approximately 74% and construction equipment accounting for approximately 19% of CNH's total revenue. In addition, CNH provides financing and insurance products
and services to its
end-user customers and authorized dealers through its CNH Capital America LLC ("CNH Capital") business unit. CNH is a publicly-traded company and a majority-owned subsidiary of Fiat
Industrial S.p.A.

CNH
is the world's second largest manufacturer of agricultural equipment. CNH owns and operates the Case IH Agriculture and New Holland Agriculture brands. Case IH Agriculture,
recognized by the red color of its equipment, possesses over 160 years of farm equipment heritage. New Holland Agriculture, recognized by the blue color of its tractors and the yellow color of
its harvesting and hay equipment, has over 100 years of farm equipment industry experience. CNH's agricultural equipment dealers are assigned authorized store locations but do not have
exclusive territories.

CNH
is one of the world's largest manufacturers of construction equipment in terms of market share, owning and operating the Case Construction, New Holland Construction and Kobelco
brands. CNH's construction equipment dealers are assigned a specific geographic area of responsibility, which typically includes an entire state, within which the dealers have the right to sell new
Case Construction, New Holland Construction and/or Kobelco equipment.

We
have entered into separate dealership agreements with certain CNH entities to sell the Case IH Agriculture, New Holland Agriculture, Case Construction and New Holland Construction
brands. These dealer agreements authorize us to sell CNH equipment and parts and entitle us to use CNH trademarks and trade names, with certain restrictions. The CNH entities have the right to
terminate their dealer agreements with us immediately in certain circumstances, including if a person acquires 20% or more of our common stock without CNH's consent, and, in some cases, for any reason
90 days following written notice. The dealership agreements and industry practices generally provide that payment on equipment and parts purchased from CNH entities is due within 30 days
and is typically subject to floorplan financing as discussed below. With respect to sales of equipment, payments from customers, which are typically financed by a third party, are due upon sale.
Payments from customers for parts and services are due within 30 days. CNH makes available to us any floorplans, parts return programs, sales or incentive programs or similar plans or programs
it offers to other dealers, and provides us with promotional items and marketing materials.

Based
upon information provided to us by CNH, we are the world's largest retail dealer of Case IH Agriculture equipment and a major retail dealer of New Holland Agriculture, Case
Construction and New Holland Construction equipment in the U.S. Thus, our relationship with CNH entities is more than a typical supply relationship; it is strategic for both our company and CNH. In
that regard, it is in our mutual interests to maintain the strong longstanding relationship we share.

Other Suppliers

In addition to products supplied by CNH, we sell a variety of new equipment, parts and attachments from other manufacturers. These
products tend to address specialized niche markets and complement the CNH products we sell by filling gaps in the CNH line of products. We believe our offering of products for specialized niche
markets supports our goal of being a one-stop solution for equipment needs at each of our stores. Approximately 18.6% of our total new equipment sales in fiscal 2011 resulted from sales of
products manufactured by companies other than CNH, with our single largest manufacturer other than CNH representing less than 3.1% of our total new equipment sales. The terms of our arrangements with
these other suppliers vary, but most of the dealership agreements contain termination provisions allowing the supplier to terminate the agreement after a specified notice

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period,
which is typically 30 days. Payment and financing practices with these other suppliers are similar to those practices described above with respect to CNH entities.

Operating Segments, Products and Services

We operate our business in two reportable segments, Agriculture and Construction. Within each of our Agriculture and Construction
segments, we have four principal sources of revenue: new and used equipment sales, parts sales, repair and maintenance service and equipment rental and other business activities. See Note 16 to
our consolidated financial statements included elsewhere in this annual report for additional information regarding our segments.

Equipment Sales

We sell new agricultural and construction equipment manufactured under the CNH family of brands as well as equipment from a variety of
other manufacturers. The used equipment we sell is from inventory acquired through trade-ins from our customers and selective purchases. The agricultural equipment we sell and service
includes application equipment and sprayers, combines and attachments, hay and forage equipment, planting and seeding equipment, precision farming technology, tillage equipment, and tractors. The
construction equipment we sell and service includes articulated trucks, compact track loaders, compaction equipment, cranes, crawler dozers, excavators, forklifts, loader/backhoes, loader/tool
carriers, motor graders, skid steer loaders,
telehandlers and wheel loaders. We sell new and used equipment through our professional, in-house retail sales force, which is organized by geography and operating segment. We also sell
used equipment through our outlet stores. We believe this organizational structure improves the effectiveness of our sales force, better serves our customers and helps us negotiate advantageous
trade-in purchase terms. Equipment sales generate cross-selling opportunities for us by populating our markets with equipment we repair and maintain and for which we sell parts. For the
year ended January 31, 2011, equipment revenue was $855.4 million, representing 78.2% of total revenue for the period.

Parts Sales

We sell a broad range of maintenance and replacement parts on equipment that we sell, as well as other types of equipment. We maintain
an extensive in-house parts inventory to provide timely parts and repair and maintenance support to our customers. We generally are able to acquire out-of-stock
parts directly from manufacturers within two business days. Our parts sales provide us with a relatively stable revenue stream that is less sensitive to economic cycles than our equipment sales and
rental operations. For the year ended January 31, 2011, parts revenue was $141.0 million, representing 12.9% of total revenue for the period.

Repair and Maintenance Services

We provide repair and maintenance services, including warranty repairs, for our customers' equipment. Each of our stores includes
service bays staffed by trained service technicians. Our technicians are also available to make on-site repairs. In addition, we provide proactive and comprehensive customer service by
maintaining service histories for each piece of equipment owned by our customers, maintaining 24/7 service hours in times of peak service usage, providing on-site repair services,
scheduling off-season maintenance activities with customers, notifying customers of periodic service requirements and providing training programs to customers to educate them as to
standard maintenance requirements. At the time equipment is purchased, we also offer customers the option of purchasing extended warranty protection provided by our suppliers. Our after-market
services have historically provided us with a high-margin, relatively stable source of revenue through changing economic cycles. For the year ended January 31, 2011, service revenue
was $74.5 million, representing 6.7% of total revenue for the period.

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Equipment Rental and Other Business Activities

We rent equipment to our customers on a short-term basis for periods ranging from a few days to a few months. We actively
manage the size, quality, age and composition of our rental fleet and use our information technology systems to closely monitor and analyze customer demand and rate trends. We maintain the quality of
our fleet through our on-site parts and services support and dispose of rental equipment through our retail sales force. Our rental business creates cross-selling opportunities for us in
equipment sales. In addition, we provide ancillary equipment support activities such as equipment transportation, GPS signal subscriptions in connection with precision farming and reselling CNH
Capital finance and insurance products. For the year ended January 31, 2011, other revenue was $23.6 million, representing 2.2% of total revenue for the period.

Customers

We serve over 49,000 Agriculture customers in the U.S., primarily in North Dakota, South Dakota, Minnesota, Iowa and Nebraska. Our
customers vary from small, single machine owners to large farming operations. In fiscal 2011, no single customer accounted for more than 1.0% of our Agriculture revenue and our top ten customers
combined accounted for approximately 4.4% of our total Agriculture revenue.

We
serve over 15,000 Construction customers in the U.S., primarily in North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Wyoming and Montana. Our customers include a wide range of
construction contractors, public utilities, municipalities and maintenance contractors. They vary from small, single machine owners to large contracting firms that operate under sophisticated capital
equipment and maintenance budgets. In fiscal 2011, no single customer accounted for more than 1.0% of our Construction revenue and our top ten customers combined accounted for approximately 5.3% of
our total Construction revenue.

Our
stores enable us to closely service local and regional customers. We believe the Titan Operating Model enables us to satisfy customer requirements and increase revenue through
cross-selling opportunities presented by the various products and services that we offer. In addition to our U.S. customers, we sell equipment on a limited basis to international customers, primarily
in Eastern Europe. Our U.S. customers primarily finance their equipment purchases through CNH Capital.

Floorplan Financing

We attempt to maintain at each store, or have readily available at other stores in our network, sufficient inventory to satisfy
customer needs. Inventory levels fluctuate throughout the year and tend to increase before the primary sales seasons for agricultural equipment. The cost of financing our inventory is an important
factor affecting our financial results.

CNH Capital

CNH Capital offers floorplan financing to CNH dealers for extended periods to finance products from both CNH and other suppliers. CNH
Capital provides this financing in part to enable dealers to carry representative inventories of equipment and encourage the purchase
of goods by dealers in advance of seasonal retail demand. CNH Capital charges variable market rates of interest based on the prime rate on balances outstanding after any interest-free
periods and retains a security interest in all of our assets, including inventories, which it inspects periodically. The interest-free periods, which CNH offers periodically in the form of
additional incentives or special offers, typically average four months for new and used agriculture equipment and new construction equipment. CNH Capital also provides financing for used equipment
accepted in trade, repossessed equipment and approved equipment from other suppliers, and receives a security interest in such equipment.

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Other Financing Sources for Equipment

In addition to the financing provided by CNH Capital, financing also may be available through floorplan financing programs provided by
the suppliers, which may be financed by such suppliers themselves or through third party lenders.

Other Financing

We have a Credit Agreement with the Wells Fargo Bank Syndicate, which includes a $175.0 million wholesale floorplan line of
credit to finance equipment inventory purchases.

Sales and Marketing

As part of the Titan Operating Model, we have centralized sales support and marketing management. All of our stores benefit from our
centralized media buys, strategic planning, sales support and training, and we provide our store managers and their sales teams with flexibility to localize sales and marketing.

We
currently market our products and services through:



Field Marketers

Our field marketers perform a variety of functions, such as servicing customers at our stores, calling on existing customers and
soliciting new business at farming, construction and industrial sites. These field marketers target customers in specific areas, and we develop customized marketing programs for our sales force by
analyzing each customer group for profitability, buying behavior and product selection. All members of our sales force are required to attend frequent in-house training sessions to develop
product and application knowledge, sales techniques and financial acumen. Our sales force is supported by our corporate marketing department.

Parts Counter and Service Managers

Our parts counter and service managers are involved in our uptime service efforts, taking advantage of our seasonal marketing campaigns
in parts and service sales. As a group, they have won multiple awards from our suppliers for their efforts benefiting both our customers and our key strategic partners.

Print, Broadcast and Web-Based Advertising Campaigns

Each year we initiate several targeted direct mail, print and broadcast advertising and marketing campaigns. CNH and other suppliers
periodically provide us with advertising funds, which we primarily use to promote new equipment, parts and financing programs. We will continue to explore and launch additional sales channels as
appropriate, including, for example, new internet-based efforts.

Remarketing Division

Our remarketing division capitalizes on sales opportunities for aged used agricultural and construction equipment transferred out of
our retail stores. We have opened two outlet stores that sell used equipment. In addition, we are actively engaged in marketing equipment through our website.

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Competition

The agricultural and construction equipment sales and distribution industries are highly competitive and fragmented, with large numbers
of companies operating on a regional or local scale. Our competitors range from multi-location, regional operators to single-location, local dealers and include dealers and distributors of competing
equipment brands, including John Deere, Caterpillar and the AGCO family of brands, as well as other dealers and distributors of the CNH family of brands. Competition among equipment dealers, whether
they offer agricultural or construction products or both, is primarily based on the price, value, reputation, quality and design of the products offered by the dealer, the customer service and repair
and maintenance service provided by the dealer, the availability of equipment and parts and the accessibility of stores. While we believe we compete favorably on each of the identified competitive
factors, our sales and margins may be impacted depending on (i) the extent of aggressive pricing competition through manufacturer discount programs or other competitive pricing tactics,
(ii) our ability to obtain higher service gross margins based on our service quality and reputation and (iii) our ability to attract new and maintain existing customers based on the
availability and quality of the products we offer and our local relationship and reputation.

The
number of agricultural and construction equipment dealers operating on a regional scale is limited and we are one of the principal regional-scale agricultural and construction
equipment dealers in the U.S. The primary regional-scale equipment dealers with whom we compete include RDO Equipment Co., Butler Machinery, Ziegler Inc. and Brandt Holdings Co.
RDO Equipment Co. is a John Deere agricultural and construction equipment dealer with 59 locations in nine states, including North Dakota, South Dakota, Minnesota and Montana. Butler Machinery
is a Caterpillar construction and agriculture equipment dealer with 12 locations in North Dakota and South Dakota. Ziegler Inc. is a Caterpillar construction and agriculture equipment dealer
with 20 locations in three states, including Minnesota and Iowa. Brandt Holdings owns John Deere, Vermeer and Bobcat construction and agricultural equipment dealers with 32 locations in 11 states
including Iowa, Minnesota, Nebraska, North Dakota, and South Dakota.

Information Technology Systems

We currently use an integrated management reporting system developed and supported by Dealer Information Systems Corporation to manage
our operating information. We are in the process of implementing a new enterprise resource planning ("ERP") system that will replace our current management reporting system. Our information system
enables us to closely monitor our performance and actively manage our business on a consolidated and segment basis and includes features that were enhanced to support the Titan Operating Model,
including detailed store-based financial reporting, inventory management and customer relationship management.

Through
our information system we maintain a complete database on inventory of parts and equipment and a centralized inventory control system for each segment. Our system enables each
store to access the available inventory of our other stores before ordering additional parts or equipment from our suppliers. We are also able to monitor inventory levels and mix at each store and
make adjustments in accordance with our operating plan. Finally, our system is externally connected to CNH, enabling us to locate CNH equipment and parts inventories, and communicate with other CNH
dealers.

Our
customer relationship management system provides sales and customer information and other organizational tools to assist our sales force. We maintain an extensive customer database
that allows us to monitor the status and maintenance history of our customers' equipment and enables us to more effectively provide parts and services to meet their needs. We also use our relationship
management information system and customer database to monitor sales information and customer demand.

The
data we store in our information system is backed-up on a daily basis and stored at an off-site location. Thus, if our system were to become inoperable, we
would be able to continue operations through an off-site data center. Further, we own the software and hardware necessary to operate this system and have employees trained to manage and
maintain the software without reliance on external support.

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Corporate Information

We were incorporated as a North Dakota corporation in 1980 and reincorporated in Delaware in December 2007 prior to our initial public
offering. Our executive offices are located at 644 East Beaton Drive, West Fargo, ND 58078-2648. Our telephone number is (701) 356-0130. We maintain a web site at www.titanmachinery.com.

Intellectual Property

We do not have any registered intellectual property. Case IH, Case and New Holland are registered trademarks of CNH, which we use in
connection with advertisements and sales as authorized under our dealership agreements. We license trademarks and trade names of new equipment obtained from suppliers other than CNH from their
respective owners. We operate each of our stores under either the Titan Machinery name or, if there was strong local name recognition and customer loyalty at a location we acquired, the name
historically used by the dealership in that location for a transition period, the length of which can vary depending upon the location.

Product Warranties

Product warranties for new equipment and parts are provided by our suppliers. The term and scope of these warranties vary greatly by
supplier and by product. At the time equipment is purchased, we also offer customers the option of purchasing extended warranty protection provided by our suppliers. Suppliers pay us for repairs we
perform to equipment under warranty. We generally sell used equipment "as is" and without manufacturer's warranty, although manufacturers sometimes provide limited warranties if the supplier's
original warranty is transferable and has not expired. Typically, we provide no additional warranties on used equipment.

Seasonality

Our quarterly operating results are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of
equipment purchases, rentals, and after-sales parts and service purchases by our Agriculture and Construction customers.

Employees

As of April 1, 2011, we employed 1,596 full-time and 278 part-time employees. None of our employees is
covered by a collective bargaining agreement. We believe our relations with our employees are good.

Governmental Regulation

We are subject to numerous federal, state, and local rules and regulations, including regulations promulgated by the Environmental
Protection Agency and similar state agencies, with respect to storing, shipping, disposing, discharging and manufacturing hazardous materials and hazardous and non-hazardous waste. These
activities are associated with the repair and maintenance of equipment at our stores. Currently, none of our stores or operations exceeds small quantity generation status. Compliance with these rules
and regulations has not had any material effect on our operations, nor do we expect it to in the future. Further, we have not made, and do not anticipate making, any material capital expenditures
related to compliance with environmental regulations. However, there can be no assurance that these expectations are accurate, particularly if regulations change, unforeseen incidents occur or unknown
past contamination or non-compliance is discovered, among other similar events.

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ITEM 1A.    RISK FACTORS

We are substantially dependent upon our relationship with CNH.

We are an authorized dealer of CNH agricultural and construction equipment and parts. In fiscal 2011, CNH supplied approximately 82.5%
of the new agricultural equipment and 71.3% of the new construction equipment we sold and represented a significant portion of our parts revenue. Our acquisition strategy contemplates the acquisition
of additional CNH geographic areas of responsibility and store locations in both the Agricultural and Construction equipment segments. We depend on CNH Capital for floorplan financing to purchase a
substantial portion of our inventory. In addition, CNH Capital provides a significant percentage of the financing used by our customers to purchase CNH equipment from us. CNH also provides incentive
programs and discount programs from time to time that enable us to price our products more competitively. In
addition, CNH conducts promotional and marketing activities on national, regional and local levels. Due to our substantial dependence on CNH, our success depends, in significant part, on
(i) the overall reputation and success of CNH; (ii) the availability and terms of floorplan financing and customer financing from CNH Capital; (iii) the incentive and discount
programs provided by CNH and its promotional and marketing efforts for its agricultural and construction products; (iv) the goodwill associated with CNH trademarks; (v) the introduction
of new and innovative products by CNH; (vi) the manufacture and delivery of competitively-priced, high quality equipment and parts by CNH in quantities sufficient to meet our customers'
requirements on a timely basis; (vii) the quality, consistency and management of the overall CNH dealership system; and (viii) the ability of CNH to manage its risks and costs, including
those associated with being a multinational company. If CNH does not provide, maintain or improve any of the foregoing, or if CNH were sold or reduced or ceased operations, there could be a material
adverse effect on our financial condition and results of operations.

CNH may terminate its dealership agreements with us or change the terms of those agreements, which could adversely affect our business.

Under our dealership agreements with CNH through CNH America LLC, CNH's U.S. manufacturing entity, CNH entities have the right to
terminate these agreements immediately in certain circumstances, and, in some cases, for any reason 90 days following written notice. Furthermore, CNH entities may change the terms of their
agreements with us, among other things, to change our sales and service areas and/or the product, pricing or delivery terms. CNH routinely conducts evaluations of dealership standards, customer
satisfaction surveys and market share studies, the results of which can impact the relationships with its dealers. CNH uses the evaluation results to increase or decrease the monetary rewards to
dealers, or limit or expand the availability of financing, warranty reimbursements or other marketing incentives. If CNH were to change the terms of any or all of these agreements in a manner that
adversely affects us, our business may be harmed, and if CNH were to terminate all or any of its dealer agreements with us, our business would be severely harmed.

Restrictions in our CNH dealership agreements may significantly affect our operations and growth and prevent a change in control of our company.

We operate our stores pursuant to CNH's customary dealership agreements. These agreements impose a number of restrictions and
obligations on us with respect to our operations, including our obligations to actively promote the sale of CNH equipment within our designated geographic areas of responsibility, fulfill the warranty
obligations of CNH, provide services to our customers, maintain sufficient parts inventory to service the needs of our customers, maintain inventory in proportion to the sales potential in each sales
and service geographic area of responsibility, maintain adequate working capital and maintain stores only in authorized locations. Prior consent of CNH is required for the acquisition by another party
of 20% or more of our outstanding stock and for our acquisition of other CNH dealerships; otherwise, CNH may terminate our dealership agreements. There can be no

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assurance
that CNH will give its consent. The restrictions and obligations in our CNH dealership agreements limit our flexibility in operating our current stores and acquiring new stores, which could
have an adverse effect on our operations and growth. Furthermore, the requirement that CNH consent to the acquisition by any party of 20% or more of our outstanding stock may have the effect of
discouraging transactions involving a change in our control, including transactions that stockholders might deem to be in their best interests.

Our equipment dealer appointments are not exclusive to the geographic areas we serve, which could adversely affect our operations and financial condition.

CNH could appoint other equipment dealers in close proximity to our existing stores. The sales and service geographic areas of
responsibility assigned to our dealerships can be enlarged or reduced by CNH upon 30 days' prior written notice. CNH and other equipment dealers can also sell in our sales and service
geographic areas of responsibility. To the extent CNH appoints other equipment dealers within our markets, enlarges or reduces the sales and service geographic areas of responsibility relating to our
stores, amends the dealership agreements or imposes new or different terms or conditions under the dealer agreements, our operations and financial condition could be adversely affected.

Our operating results may be adversely impacted by an under-supply or over-supply of equipment.

If our suppliers cannot continue to provide us a reliable supply of new equipment, we may not be able to meet our customers' demand and
our operating results could be negatively impacted. In times of heightened global demand for equipment, which is often driven by other factors (e.g., farm cash receipts often drive demand for
agricultural equipment and infrastructure development often drives construction equipment demand), equipment suppliers may experience difficulty providing all dealerships a reliable supply of new
agricultural equipment, which could adversely impact our results of operations. Further, an under-supply of equipment may cause prices for such equipment to increase. To the extent we cannot pass on
any increased costs of equipment to our customers, our operating results may suffer. Conversely, an industry over-supply of equipment may also adversely affect our operations. Though
manufacturers typically manage production of new equipment in response to demand, there may be short-term under-supplies or over-supplies of new equipment as manufacturers
adjust to industry demand fluctuations. For used and rental equipment, short-term lease programs and commercial rental agencies for construction and agricultural equipment have expanded
significantly in North America. Nationwide rental conglomerates have become sizeable purchasers of new equipment and can have a significant impact on industry sales and margins. When equipment comes
off of lease or is replaced with newer equipment by rental agencies, there may be a significant increase in the availability of late-model used equipment. An over-supply of
used equipment could adversely affect demand for, or the market prices of, new and used equipment. In addition, a decline in used equipment prices could have an adverse effect on residual values for
leased equipment, which could adversely affect our financial performance.

If our acquisition plans are unsuccessful, we may not achieve our planned revenue growth.

We believe a significant portion of our future growth will depend on our ability to acquire additional dealerships. Our ability to
continue to grow through the acquisition of additional CNH geographic areas of responsibility and store locations or other businesses will be dependent upon the availability of suitable acquisition
candidates at acceptable costs, our ability to compete effectively for available acquisition candidates and the availability of capital to complete the acquisitions. We may not successfully identify
suitable targets, or if we do, we may not be able to close the transactions, or if we close the transactions, they may not be profitable. In addition, CNH's consent is required for the acquisition of
any CNH dealership, and the consent of the Wells Fargo Bank Syndicate is required for

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the
acquisition of dealerships meeting certain thresholds or other criteria defined in the Senior Secured Credit Facility. CNH typically evaluates management, performance and capitalization of a
prospective acquirer in determining whether to consent to the sale of a CNH dealership. There can be no
assurance that CNH or the Wells Fargo Bank Syndicate will consent to any or all acquisitions of dealerships that we may propose.

Our potential inability to successfully integrate newly-acquired dealerships may adversely affect our financial results.

Once an acquisition is completed, we face many other risks commonly encountered with growth through acquisitions. These risks include
incurring significantly higher than anticipated capital expenditures and operating expenses; failing to assimilate the operations and personnel of the acquired dealerships; disrupting our ongoing
business; dissipating our management resources; failing to maintain uniform standards, controls and policies; and impairing relationships with employees and customers as a result of changes in
management. Fully integrating an acquired dealership into our operations and realization of the full benefit of our strategies, operating model and systems may take several years. We may not be
successful in overcoming these risks or any other problems encountered with such acquisitions. To the extent we do not successfully avoid or overcome the risks or problems related to acquisitions, our
results of operations and financial condition could be adversely affected. Future acquisitions also will have a significant impact on our financial position and capital needs, and could cause
substantial fluctuations in our quarterly and yearly results of operations. Acquisitions could include significant goodwill and intangible assets, which may result in future impairment charges that
would reduce our stated earnings.

We
have grown significantly through acquisitions in recent years and expect to continue to grow through acquisitions. Management has expended, and expects to continue to expend,
significant time and effort in evaluating, completing and integrating acquisitions and opening new stores. Our systems, procedures and controls may not be adequate to support our expanding operations.
Any future growth will also impose significant added responsibilities on our executives, including the need to identify, recruit and integrate new senior level managers and executives. We may not be
able to identify and retain such additional management. If we are unable to manage growth efficiently and effectively, or are unable to attract and retain additional qualified management, there could
be a material adverse effect on our financial condition and results of operations.

We lease many of our dealership sites from related parties, and if we are unable to obtain commercially reasonable terms and conditions from these related parties or
unrelated third parties in the future, our growth and financial condition may be adversely affected.

We lease 43 of our 81 dealership sites from entities affiliated with David Meyer, our Chairman and Chief Executive Officer, Tony
Christianson, one of our directors, Peter Christianson, our President and Chief Operating Officer, or James L. Williams, one of our directors. We expect that we may lease future dealership
sites we acquire from parties related to our affiliates. There is no guarantee that related parties will offer us commercially reasonable terms and conditions or that unrelated third parties will
provide alternate dealership sites on commercially reasonable terms and conditions. If we cannot obtain commercially reasonable terms and conditions on leases for our current
or future dealership sites from entities related to Messrs. Meyer, Tony Christianson, Peter Christianson or Williams, or from unrelated third parties, our growth and financial condition may be
adversely affected.

Substantial inventory financing is required for the equipment we sell but may not be available, which could adversely affect our growth and results of operations.

The sale of agricultural and construction equipment requires substantial inventories of equipment and parts to be maintained at each
store to facilitate sales to customers on a timely basis. We generally

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purchase
our inventories of equipment with the assistance of floorplan financing programs through CNH Capital and other lenders. As we grow, whether internally or through acquisitions, our inventory
requirements will increase and, as a result, our financing requirements also will increase. In the event that our available financing sources are not maintained or are insufficient to satisfy our
future requirements, we would be required to obtain financing from other sources. There can be no assurance that additional or alternative financing could be obtained on commercially reasonable terms.
To the extent additional financing cannot be obtained on commercially reasonable terms, our growth and results of operations could be adversely affected.

Failure to properly manage our equipment inventory, our largest asset, would have a significant adverse effect on our operations.

Our equipment inventory has generally represented 50% or more of our total assets. Thus, our success is significantly dependent upon
our ability to manage the supply and cost of new and used equipment. The pricing of equipment can be highly volatile and subject to negotiation, particularly in the used equipment market. Pricing for
and sales of used equipment can be significantly affected by the limited market for such equipment. Further, liquidation prices of used agricultural and construction equipment can have significant
fluctuations due to economic cycles, utilization trends and degree of specialization. We are dependent upon the ability of our management and buyers to negotiate acceptable purchase prices, to affect
a proper balance of new and used equipment and to manage the amount of equipment in inventory to assure quick turnover. Our failure to manage our inventory and equipment costs could materially
adversely affect our results of operations and financial condition.

Adverse changes in governmental agricultural policies, including decreases in farm subsidies, may reduce demand for agricultural equipment and cause our revenue to decline.

Changes in governmental agricultural policy could adversely affect sales of agricultural equipment. Government subsidies influence
demand for agricultural equipment. Future farm bills and USDA budgets may reduce the amount of payments to individual farmers. We cannot predict the outcome of such governmental funding, and to the
extent that future funding to individual farmers is reduced, these reductions in funding could reduce demand for agricultural equipment and we could experience a decline in revenue.

Economic events, particularly in the credit markets, may adversely affect our business and results of operations.

The agricultural and construction equipment industries are affected by macroeconomic factors, including changes in international,
national, regional, and local economic conditions. Current global economic conditions pose a risk to our business as customers may postpone spending in response to tighter credit, negative financial
news, downturns in agricultural commodity prices and the housing market and/or declines in income or asset values, which could have a material negative effect on the demand for our products and
services. Our business is also particularly dependent on our access to the capital and credit markets to finance acquisitions and manage inventory. Tight credit markets, a low level of liquidity in
many financial markets, and extreme volatility in fixed income, credit, currency and equity markets have the potential to adversely affect our business. Such disruptions in the overall economy and
financial markets and the related reduction in consumer confidence in the economy, slow activity in the capital markets, negatively affect access to credit on commercially acceptable terms, and may
adversely impact the access of us or our customers to credit and the terms of any such credit. Further, any decreased collectability of accounts receivable or increase in customer insolvencies could
negatively impact our results of operations. The nature of the agricultural and construction equipment industries is such that a downturn in demand can occur suddenly, due to tightening credit
markets, decreasing commodity prices or demand, decreasing infrastructure and housing development, adverse

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weather
conditions or other circumstances, resulting in excess inventory, un-utilized production capacity and reduced prices for equipment, which would harm our revenue and profitability.
Uncertainty about current global economic conditions, agricultural commodity prices and demand and the housing market could also continue to increase the volatility of our stock price.

Adverse changes in the agricultural industries could result in decreases in purchases of agricultural equipment and harm our revenue and profitability.

Our business depends to a great extent upon general activity levels in the agricultural industries. Changes in farm income and farmland
value, the level of worldwide farm output and demand for farm products, commodity prices, animal diseases and crop pests, and limits on agricultural imports are all material factors that could
adversely affect the agricultural industries and result in a decrease in the amount of agricultural equipment that our customers purchase. The nature of the agricultural equipment industries is such
that a downturn in demand can occur suddenly, resulting in excess inventories, un-utilized production capacity and reduced prices for new and used equipment. These downturns may be
prolonged and our revenue and profitability would be harmed.

Adverse changes in the construction industry could result in decreased demand for construction equipment and harm our revenue.

General economic conditions in markets in which we do business can impact the demand for our construction equipment. The construction
industry in our geographical areas has experienced a prolonged economic down cycle as a result of the macroeconomic environment, which negatively impacts sales of light construction equipment.
Decreased demand for our products can have a negative impact on our financial performance and cash flow. Our business and earnings are impacted by the changes in the construction industry. The ability
of consumers to obtain mortgages for the purchase of newly constructed homes or commercial properties impacts the overall demand for new home construction. The uncertainties created by recent events
in the sub-prime mortgage market and their impact on the overall mortgage market, including the tightening of credit standards, could adversely affect the ability of consumers to obtain
financing, thus reducing demand for new construction and in turn reducing our customers' demand for our construction equipment. Reduced demand for our construction equipment could negatively affect
our financial performance and cash flow.

Climate fluctuations may negatively impact the agricultural and construction equipment markets and harm our sales.

Weather conditions, particularly severe floods and droughts, can have a significant impact on the success of regional agricultural and
construction markets and, therefore, the economic conditions of the regions in which we operate stores. Accordingly, our financial condition and results of operations may be materially and adversely
affected by any adverse cyclical trends or weather conditions. Our quarterly operating results are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of
equipment, parts and service purchases by our customers. A significant increase in the severity of weather cycles could increase the volatility of our results of operations and impact our financial
condition. If we acquire businesses in geographic areas other than
where we currently have operations, we may be affected more by the above-mentioned or other seasonal and equipment buying trends.

Our results of operations may fluctuate from period to period due to interest rate adjustments.

The ability to finance affordable purchases, of which the interest rate charged is a significant component, is an important part of a
customer's decision to purchase agricultural or construction equipment. Volatility in the credit markets may have a negative impact on our business by making it more difficult for certain of our
customers to obtain financing to purchase agricultural or construction

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equipment.
Interest rate increases may make equipment purchases less affordable for customers and, as a result, our revenue and profitability may decrease as we manage excess inventory and reduce
prices for equipment. To the extent we cannot pass on our increased costs of inventory to our customers, our net income may decrease. Conversely, any decrease in interest rates may positively affect a
customer's decision to purchase agricultural or construction equipment. Partially as a result of the foregoing, our results of operations have in the past and in the future are expected to continue to
fluctuate from quarter to quarter and year to year. We are unable to anticipate the timing and impact of interest rate adjustments.

Aggressive pricing competition could adversely affect our results of operation and growth.

The agricultural and construction equipment sales and distribution industries are highly competitive and fragmented, with large numbers
of companies operating on a regional or local scale. Historically, our competitors have competed aggressively on the basis of pricing or inventory availability, resulting in decreased margins on our
sales to the extent we choose to match our competitors' downward pricing. To the extent we choose not to match or remain within a reasonable competitive distance from our competitors' pricing, it
could also have an adverse impact on our results of operations, as we may lose sales volume. In addition, to the extent CNH's competitors provide their dealers with more innovative or higher quality
products, better customer financing, or have more effective marketing efforts, our ability to compete and financial condition and results of operations could be adversely affected.

We are substantially dependent on our Chief Executive Officer and President/Chief Operating Officer, the loss of either of whom could have a material adverse effect on our
business.

We believe our success will depend to a significant extent upon the efforts and abilities of David Meyer, our Chairman and Chief
Executive Officer, and Peter Christianson, our President and Chief Operating Officer. The employment relationships with both Mr. Meyer and Mr. Christianson are terminable by us or each
of them at any time for any reason. The loss of the services of one or both of these persons and other key employees could have a material adverse effect on our operating results.

Selling agricultural and construction equipment and parts subjects us to product liability risks that could adversely affect our financial condition and reputation.

Products sold or serviced by us may expose us to potential liabilities for personal injury or property damage claims relating to the
use of such products. Our product liability insurance may not be adequate to cover product liability claims. Such insurance may not continue to be available on economically reasonable terms. An
uninsured or partially insured claim for which indemnification is not provided could have a material adverse effect on our financial condition. Furthermore, if any significant claims are made against
us or against CNH or any of our other suppliers, our business may be adversely affected by any resulting negative publicity.

Being a public company has substantially increased our legal and financial compliance costs, which could harm our business, financial condition and results of operations.

Compliance with publicly-traded company regulations adversely impacts our resources. As a publicly-traded company, we are subject to
rules and regulations that increase our legal and financial compliance costs, make some activities more time-consuming and costly, and divert our management's attention away from the
operation of our business. These rules and regulations may make it more difficult and more expensive for us to maintain director and officer liability insurance and we may be required to accept
reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, we may experience more difficulty attracting and retaining qualified
individuals to serve on our board of directors or as executive officers. We cannot predict or

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estimate
the amount of additional costs we may incur as a result of these requirements or the timing of these costs. The costs of being a publicly-traded company and the attendant diversion of
management's
time and attention may have a material adverse effect on our business, financial condition and results of operations.

Our internal control over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to its effectiveness,
which could have a significant and adverse effect on our business and reputation.

We are required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and rules and regulations of
the SEC thereunder. If we fail to maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able
to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. We cannot be certain as to the timing of
completion of our evaluation, testing and any remedial actions or their impact on our operations. If we are not able to comply with the requirements of Section 404, our independent registered
public accounting firm may not be able to certify as to the effectiveness of our internal control over financial reporting, we may be unable to report our financial results accurately or in a timely
manner and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of
confidence in the reliability of our financial statements. In fiscal 2010, we began implementing a new ERP system. Unforeseen problems with or any difficulties encountered integrating the new ERP
system could result in internal control deficiencies.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

Equipment Stores

We currently operate 81 agricultural and construction equipment stores, including two outlet stores in the following locations. Certain
stores (those designated with an *) are included in the Agriculture segment but also sell some construction equipment.

Agriculture Segment

North Dakota (14 stores)

Iowa (14 stores, including 1 outlet)Arthur

Lidgerwood

Anthon

Grundy CenterCasselton

Lisbon

Avoca

Iowa FallsGrand Forks*

Mandan*

Blairstown

KingsleyJamestown

Mayville

Center Point*

Le MarsKintyre

Wahpeton (2 stores)

Cherokee

OskaloosaKulm

Wishek

Cherokee (outlet)

PellaLamoure



Greenfield

Waverly


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Minnesota (14 stores, including 1 outlet)

South Dakota (11 stores)Ada

Moorhead

Aberdeen (2 stores)*

MillerAlbert Lea

Moorhead (outlet)

Britton

PierreCrookston*

Pipestone

Highmore

Sioux FallsElbow Lake

Redwood Falls

Huron

RedfieldFergus Falls

Roseau

Milbank

WatertownGraceville

Thief River FallsMarshall*

Winger




Nebraska (6 stores)Grand Island

KearneyHastings

LexingtonHoldrege

North Platte


Construction Segment

North Dakota (5 stores)

Iowa (4 stores)Bismarck

Minot

Clear Lake

Des MoinesFargo (2 stores)

Williston

Davenport

Sioux City




Nebraska (2 stores)

South Dakota (2 stores)Lincoln

Omaha

Rapid City

Sioux Falls




Montana (6 stores)

Wyoming (3 stores)Big Sky

Great Falls

Casper

GilletteBillings (2 stores)

Missoula

CheyenneBozeman


Our
stores are generally located in rural areas on property zoned for commercial use. The stores typically range from 5,000 square feet with three acres of land to 40,000 square feet
with 14 acres of land. We fully utilize the leased space for each of our stores and believe the respective square footage and related acreage is adequate to meet our current and anticipated needs.

Store Lease Arrangements

As of January 31, 2011, we leased real estate for 43 of our stores from entities affiliated with David Meyer, our Chairman and
Chief Executive Officer, Tony Christianson, one of our directors, Peter Christianson, our President and Chief Operating Officer or James L. Williams, one of our directors. Of these
43 stores, we leased 41 dealership sites from Dealer Sites, LLC, an entity owned in part by Messrs. Meyer, Tony Christianson and Peter Christianson or their affiliates; one dealership
site from C.I. Farm Power, Inc., an entity owned by Mr. Peter Christianson; and one dealership site from Arthur Mercantile Company, an entity owned in part by James L. Williams.
We leased 47 additional properties for stores and storage facilities under operating lease agreements with unrelated parties as of January 31, 2011. The leases for our dealership sites
generally expire between 2011 and 2022, other than those leases which are currently automatically renewed on a year-to-year-basis until either we or the lessor
terminate them. We do not intend to own significant amounts of real estate. Therefore, we anticipate that when we need real estate, including as part of acquiring dealerships, we will lease such real
estate from third parties, which may include affiliates of our investors, directors or management. We intend for the terms of all of our leases to be commercially reasonable. We do not believe the
terms of our leases with entities affiliated with Messrs. Meyer, Tony Christianson, Peter Christianson

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and
Williams are any less favorable to us than could be obtained in an arm's length transaction with an unrelated party.

Our
store lease agreements with entities affiliated with David Meyer, Peter Christianson, Tony Christianson and James L. Williams all contain substantially similar terms. The
leases with Dealer Sites, LLC, C.I. Farm Power, Inc. and Arthur Mercantile Company provide for fixed lease periods ranging from three to ten years. All of the leases provide for fixed monthly
rental payments and require us to pay the real estate taxes on the properties for the lease periods. The leases require that we maintain public liability and personal property insurance on each of the
leased premises, and require us to indemnify the lessor in connection with any claims arising from the leased premises during our occupation of the property. The leases generally prohibit us from
assigning the lease agreements or subletting the leased premises without the prior written consent of the lessor. The lease agreements with Dealer Sites, LLC provide that in the event Dealer Sites,
LLC and Titan Machinery Inc. agree to sell the leased premises to a party other than us or our affiliates during the term of the lease, then we shall share in half of any surplus or deficit resulting
to Dealer Sites, LLC from that sale.

Our
store lease agreements with unrelated parties contain terms comparable to the agreements with entities affiliated with our directors and officers described above. The lease periods
range from automatically renewable month-to-month terms to 20 years in length. Many of the lease agreements either give us the option to renew or extend the lease for an
additional period at the conclusion of the original lease term or automatically renew the lease term at the conclusion of the original lease period on a month-to-month or
year-to-year basis. A majority of the leases provide for fixed monthly
rental payments and require us to pay the real estate taxes on the properties for the lease periods. All of the leases require that we maintain public liability and personal property insurance on each
of the leased premises, and a majority of the leases require us to indemnify the lessor in connection with any claims arising from the leased premises during our occupation of the property. Most of
the leases prohibit us from assigning the lease agreements or subletting the leased premises without the prior written consent of the lessor. We have been granted a right of first refusal to purchase
the Watertown and one of the Aberdeen properties during the applicable lease terms. The lease agreements for the West Fargo, Kingsley, Le Mars, Watertown, Mayville and Redfield properties grant us the
option to purchase the leased premises during or at the conclusion of the lease term. The lease agreements for the Milbank and Albert Lea properties grant Dealer Sites, LLC the option to purchase the
leased premises during or at the conclusion of the lease term. The Kingsley, Le Mars and Redfield lease agreements grant the lessor the right to require Dealer Sites, LLC to purchase the leased
premises during or at the conclusion of the lease term.

As
part of our due diligence review prior to a dealership acquisition, we evaluate the adequacy, suitability and condition of the related real estate. Our evaluation typically includes a
Phase I environmental study, and if deemed necessary, a Phase II environmental study, of the real property to determine whether there are any environmental concerns. If any environmental
concerns exist, we generally require that such concerns be addressed prior to acquisition of the dealership.

Headquarters

We currently lease and occupy approximately 48,000 square feet in West Fargo, North Dakota for our headquarters, which lease expires on
May 31, 2020. We continually review our location needs, including the adequacy of our headquarters space, to ensure our space is sufficient to support our operations. We believe there is ample
opportunity for expansion in the West Fargo area if necessary.

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ITEM 3.    LEGAL PROCEEDINGS

We are, from time to time, subject to claims and suits arising in the ordinary course of business. Such claims have, in the past,
generally been covered by insurance. Management believes the resolution of other legal matters will not have a material effect on our financial condition or results of operation, although no assurance
can be given with respect to the ultimate outcome of any such actions. Furthermore, there can be no assurance that our insurance will be adequate to cover all liabilities that may arise out of claims
brought against us. We are not currently a party to any material litigation.

ITEM 4.    (REMOVED AND RESERVED)

EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages and positions of our executive officers are as follows:

Name

Age

PositionDavid Meyer


57

Chairman and Chief Executive OfficerPeter Christianson


54

President, Chief Operating Officer and DirectorMark Kalvoda


39

Chief Financial Officer


David Meyeris our Chairman and Chief Executive Officer. Mr. Meyer was a founder of our company in 1980 and has been a director of
our company since its creation. From 1976 to 1980, Mr. Meyer was a partner in a Case and New Holland dealership with locations in Lisbon and Wahpeton, North Dakota.

Peter Christiansonhas been our President and a director since January 2003, became our Chief Operating Officer in April 2011, and was our
Chief Financial Officer from August 2007 to April 2011. Prior to joining us and since 1988, he was a partner and owner of C.I. Farm Power, Inc., the operator of two of the dealership locations
acquired by Titan Machinery LLC in 2002. Peter Christianson and Tony Christianson, one of our directors, are brothers.

Mark Kalvodabecame our Chief Financial Officer in April 2011 and previously served as our Chief Accounting Officer since September 2007.
Prior to joining us, he held various positions between 2004 and 2007 at American Crystal Sugar Co., including Corporate Controller, Assistant Secretary and Assistant Treasurer. Prior to working for
American Crystal Sugar Co., he served in various financial positions within Hormel Foods Corporation.

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Table of Contents

PART II

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

Market Information

Our common stock began trading on December 6, 2007 on the Nasdaq Global Market under the symbol "TITN" in connection with our
initial public offering and began trading on the Nasdaq Global Select Market in January 2009. The following table sets forth, for the periods indicated, the high and low sale prices of our common
stock as reported by the Nasdaq Global Select Market.

High

LowFiscal 2011First Quarter

$
15.44

$
10.70Second Quarter

$
15.19

$
11.93Third Quarter

$
20.77

$
14.00Fourth Quarter

$
24.74

$
18.67Fiscal 2010First Quarter

$
12.96

$
7.50Second Quarter

$
17.00

$
9.96Third Quarter

$
14.49

$
10.38Fourth Quarter

$
13.19

$
9.81


As
of April 1, 2011, there were approximately 500 record holders of our common stock, excluding holders whose stock is held either in nominee name and/or street name brokerage
accounts.

DIVIDENDS

We have not historically paid any dividends on our common stock and do not expect to pay cash dividends on our common stock in the
foreseeable future. Payment of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition,
operating results, current and anticipated cash needs, outstanding indebtedness and plans for expansion and restrictions imposed by lenders, if any. Currently, our credit facility with the Wells Fargo
Bank Syndicate restricts our ability to pay cash dividends to an amount not to exceed 50% of consolidated net income for the then trailing four quarters, so long as no default of event of default
exists prior to or immediately following such action or otherwise results from such action.

UNREGISTERED SALES OF EQUITY SECURITIES

We did not have any unregistered sales of equity securities during the fourth quarter of fiscal 2011.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

For information on our equity compensation plans, refer to Item 12, "Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters."

REPURCHASES

We did not engage in any repurchases of our Common Stock during the fiscal quarter ended January 31, 2011.

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Table of Contents

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total return for the last trading day of the Company's last four fiscal years following
commencement of trading on December 6, 2007 in conjunction with the Company's initial public offering on a $100 investment (assuming dividend reinvestment) in each of the Common Stock of the
Company, the Russell 2000 Stock Index and the S&P 500 Retail Index.

GRAPHIC

Fiscal Year Ended January 31,December 6,
20072008

2009

2010

2011Titan Machinery Inc.

$
100.00

$
173.84

$
107.07

$
116.24

$
255.59Russell 2000 Index


100.00


90.64


56.36


76.50


99.28S&P 500 Retail Index


100.00


96.10


58.98


90.20


113.02


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Table of Contents

ITEM 6.    SELECTED FINANCIAL DATA

The data given below as of and for each of the five years in the period ended January 31, 2011, has been derived from the
Company's Audited Consolidated Financial Statements. In order to understand the effect of accounting policies and material uncertainties that could affect our presentation of financial information,
such data should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto included under Item 8 to this Form 10-K and in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of Operation included under Item 7 to this Form 10-K.

Year Ended January 31,2011

2010

2009

2008

2007(in thousands, except per share data)Statement of Operations Data:RevenueEquipment

$
855,443

$
643,186

$
540,307

$
338,382

$
220,958Parts


140,982


119,509


94,984


58,743


42,619Service


74,506


58,983


44,224


27,344


21,965Other


23,558


17,103


10,922


8,502


7,0561,094,489


838,781


690,437


432,971


292,598Cost of revenueEquipment


773,060


578,411


478,324


302,320


200,558Parts


100,281


83,219


67,270


42,568


29,909Service


27,767


21,615


16,729


10,118


8,183Other


18,813


14,441


8,245


5,913


5,337919,921


697,686


570,568


360,919


243,987Gross Profit


174,568


141,095


119,869


72,052


48,611Operating expenses


130,541


108,998


86,940


53,190


37,399Income from operations


44,027


32,097


32,929


18,862


11,212Other income (expense)Interest and other income


1,794


1,843


1,545


577


349Interest expense


(8,584
)

(6,948
)

(3,969
)

(6,292
)

(5,473
)Debt retirement costs











(3,824
)

Income before income taxes


37,237


26,992


30,505


9,323


6,088Provision for income taxes


(14,895
)

(11,255
)

(12,430
)

(4,110
)

(2,450
)Income from continuing operations


22,342


15,737


18,075


5,213


3,638Discontinued operations














Net income

$
22,342

$
15,737

$
18,075

$
5,213

$
3,638Adjustment to income:Amortization of syndication feespreferred stock











(51
)

(21
)Unpaid accumulated preferred dividends











(88
)

(102
)Income available to common stockholders

$
22,342

$
15,737

$
18,075

$
5,074

$
3,515Earnings per shareBasic

$
1.27

$
0.89

$
1.11

$
0.90

$
0.81Diluted

$
1.23

$
0.88

$
1.08

$
0.67

$
0.57Weighted average shares outstandingBasic


17,658


17,593


16,291


5,607


4,345Diluted


18,146


17,968


16,779


8,246


6,907


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Table of Contents

January 31,2011

2010

2009

2008

2007(in thousands)Balance Sheet Data:Cash

$
76,112

$
76,185

$
41,047

$
42,802

$
7,572U.S. treasury bills








44,994





Receivables


44,945


22,254


19,626


22,061


10,921Inventories


429,844


347,580


241,094


145,767


106,254Prepaid expense


1,003


1,009


533


215


186Income tax receivable





1,595


1,433


1,074


Deferred income taxes


3,247


2,266


1,426


1,027


462Goodwill and intangibles, net


23,125


15,057


12,830


8,608


3,905Property and equipment


65,372


46,604


45,269


16,023


8,175Other assets


5,198


2,262


1,996


1,792


1,397Total Assets

$
648,846

$
514,812

$
410,248

$
239,369

$
138,872Accounts payable

$
15,957

$
12,352

$
18,652

$
9,244

$
4,228Floorplan notes payable(1)


320,801


249,872


166,481


105,848


84,699Current maturities of long-term debt


4,207


7,218


7,623


5,654


2,824Customer deposits


28,180


12,974


15,158


19,310


4,608Accrued expenses


16,816


9,870


8,308


6,137


2,287Income taxes payable


2,093











378Total current liabilities


388,054


292,286


216,222


146,193


99,024Long-term liabilities


46,235


32,002


20,259


15,759


8,043Subordinated debentures











1,300


16,747Redeemable securities














1,680Total stockholders' equity


214,557


190,524


173,767


76,117


13,378$
648,846

$
514,812

$
410,248

$
239,369

$
138,872


(1)Approximately
52% of floorplan notes payable were interest bearing at January 31, 2011.


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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations
together with our financial statements and the related notes appearing under Item 8. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual
report, including information with respect to our plans and strategy for our business and expected financial results, includes forward-looking statements that involve risks and uncertainties. You
should review the "Risk Factors" under Item 1A for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the
forward-looking statements contained in the following discussion and analysis.

BUSINESS DESCRIPTION

We own and operate a network of full service agricultural and construction equipment stores in the United States. Based upon
information provided to us by CNH Global N.V. or its U.S. subsidiary CNH America LLC, collectively referred to in this annual report as CNH, we are the world's largest retail dealer of Case IH
Agriculture equipment and a major retail dealer of New Holland Agriculture, Case Construction and New Holland Construction equipment in the U.S. We operate our business through two reportable
segments, Agriculture and Construction. Within each segment, we have four principal sources of revenue, new and used equipment sales, parts sales, service, and other business activities including
equipment rental.

The
agricultural equipment we sell and service includes machinery and attachments for uses ranging from large-scale farming to home and garden use. The construction equipment we sell and
service includes heavy construction and light industrial machinery for commercial and residential construction, road and highway construction and mining applications. We offer our customers a
one-stop solution for their equipment needs through:



The
new equipment and parts we sell are supplied primarily by CNH. According to public reports filed by CNH, CNH is a leading manufacturer and supplier of agricultural and construction
equipment based on the number of units sold, primarily through the Case IH Agriculture, New Holland Agriculture, Case Construction and New Holland Construction brands. Sales of new CNH products
accounted for approximately 81.4% of our new equipment revenue in fiscal 2011, with no other supplier accounting for more than 3.1%. We acquire used equipment for resale through trade-ins
from our
customers and selective purchases. We sell parts and provide in-store and on-site repair and maintenance services. We rent equipment and provide other ancillary services such
as equipment transportation, GPS signal subscriptions and finance and insurance products.

Throughout
our 31-year operating history we have built an extensive, geographically contiguous network of 81 stores, including two outlet stores, located in North
Dakota, South Dakota, Minnesota, Iowa, Nebraska, Montana and Wyoming. We have a history of growth through acquisitions, including 34 acquisitions consisting of 75 stores operating in
seven states since January 1, 2003. We expect that acquisitions will continue to be an important component of our growth.

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Certain External Factors Affecting our Business

We are subject to a number of factors that affect our business as discussed in the sections entitled "Risk Factors" and "Information
Regarding Forward-Looking Statements." Certain of the external factors include, but are not limited to, the following:

Industry Factors

Our business is primarily driven by the demand for agricultural equipment for use in the production of food, fiber, feed grain and
renewable energy; home and garden applications; and the maintenance of commercial, residential and government properties. Based on USDA data, we believe farmers have recently experienced historically
strong economic fundamentals, driven by growing global demand for agricultural commodities in part due to growth in renewable energy and the economies of developing countries. This strong farm economy
contributed significantly to our results of operations in fiscal 2011, 2010 and 2009. We believe our operating model, as discussed in "BusinessTitan Operating Model," enables us to
maximize opportunities and implement our conservative expenditure philosophy that emphasizes scalable costs. Further, our large and diverse customer base and seven-state geographic footprint limits
our exposure to negative events that may occur in a particular area or crop. Additionally, we believe that acquisition opportunities will continue to be strong.

Our
business is also impacted by the demand for construction equipment for use in private and government commercial, residential and infrastructure construction; demolition; maintenance;
mining; energy and forestry operations. CNH and industry reports show that demand for construction equipment in our markets is driven by several factors, one of which is public infrastructure
spending, including roads and highways, sewer and water. Any growth in federal allocations to public infrastructure spending over the next few years should positively impact our future results of
operations. Likewise, any decline in federal allocations to public infrastructure spending over the next few years should negatively impact our future results of operations. To address the uncertainty
of the construction industry, we expect to continue our focus on the agriculture industry and acquisition opportunities to establish additional locations in the markets where we believe the local
construction industry will maintain its current level or grow.

Seasonality

Our quarterly operating results are subject to fluctuation due to varying weather patterns, which may impact the timing and amount of
equipment purchases, rentals, and after-sales parts and service purchases by our Agriculture and Construction customers.

Economic Cyclicality

Sales of agricultural equipment historically have fluctuated with general farm economic trends, primarily driven by farm cash receipts.
Sales of construction equipment historically have fluctuated with general economic cycles. During economic downturns, construction equipment retailers tend to experience similar periods of decline and
recession as the general economy.

Credit Market Changes

Changes in credit markets can affect our customers' ability and willingness to make capital expenditures, including purchasing our
equipment. Creditors tightened their lending standards following the collapse of the sub-prime mortgage market and these conditions may still be continuing in some areas. These tightened
lending standards may have a negative impact on our business if our customers are unable to obtain financing for equipment purchases. However, if retail interest rates remain low, our business may be
positively affected by customers who find financing purchases of our equipment more attractive due to lower borrowing costs. Our business is also particularly dependent on our access

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to
credit markets to finance acquisitions and manage inventory. Continued tightened lending standards may make it more difficult for us to obtain financing on commercially reasonable terms. We cannot
predict what future changes will occur in credit markets or how these changes will impact our business.

Inflation

Inflation has not had a material impact upon operating results and we do not expect it to have such an impact in the future. To date,
in those instances in which we have experienced cost increases, we have been able to increase selling prices to offset such increases. There can be no assurance, however, that our business will not be
affected by inflation or that we can continue to increase our selling prices to offset increased costs and remain competitive.

Acquisitions

We have a successful history of growth through acquisitions. Since January 1, 2003, we have completed 34 acquisitions consisting
of 75 stores operating in seven states. These acquisitions have been the most significant factor affecting our results of operations and liquidity over the last several years, as noted in the
period-to-period comparisons below. We expect that acquisitions will continue to be an important component of our growth. Acquisitions are typically financed with floorplan
debt, long-term debt and cash from operations. Although we cannot quantify the impact of any such potential acquisitions, we believe the nature of their impact on our financial statements
to be similar to that experienced with our prior acquisitions as noted in our discussions of period comparisons.

The
following is a summary of acquisitions completed during the identified periods.

Fiscal 2012



Fiscal 2011



Fiscal 2010



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Fiscal 2009



Critical Accounting Policies and Estimates

During the preparation of our financial statements, we are required to make estimates, assumptions and judgments that affect reported
amounts. These estimates, assumptions and judgments include those related to bad debts and credit sales, inventories, goodwill and intangibles, income taxes and legal proceedings, revenue recognition,
allowance for doubtful accounts, inventory reserves, incentive plan accruals, deferred taxes, stock-based compensation, and accounting for business combinations. We update these estimates, assumptions
and judgments as appropriate, which in most cases is at least quarterly. We use our technical accounting knowledge, cumulative business experience,

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judgment
and other factors in the selection and application of our accounting policies. While we believe the estimates, assumptions and judgments we use in preparing our financial statements are
appropriate, they are subject to factors and uncertainties regarding their outcome and therefore, actual results may materially differ from these estimates. We believe the following are our primary
critical accounting policies and estimates.

Revenue Recognition

Revenue on equipment sales is recognized upon receipt of a signed contract and delivery of product to customers. Revenue on parts sales
is recognized upon delivery of product to customers. Rental and service revenue is recognized at the time the related services are provided. In addition to outright sales of new and used equipment,
certain rental agreements may include rent-to-purchase options. Under these agreements, customers are given a period of time to exercise an option to purchase the related
equipment, with a portion of the rental payments being applied to the purchase price. Any such equipment is included in inventory until the purchase option is exercised. Payments received during the
rental period are recorded as customer deposits, with equipment sales revenue being recognized upon the exercise of the purchase option.

Inventories

New and used equipment are stated at the lower of cost (specific identification) or market value with adjustments for decreases in
market value on inventory rented but available for sale being a percentage of the rental income received on such inventory. All used equipment inventories and certain new equipment inventories,
including that which has been rented, is subject to periodic lower of cost or market evaluation. Parts inventories are valued at the lower of average cost or market value. An estimate of parts
inventories not expected to be sold in the next year has been reported separately, which is based on historical sales of parts on hand. Typically, there are no freight-in charges, except
in cases of special orders where such freight-in charges are included in the cost of inventory. Work in process is valued at the retail rates of labor incurred and parts inventories used
on service work in process at year end.

Intangible Assets and Goodwill

Intangible assets with a finite life consist of customer relationships and covenants not to compete, and are carried at cost less
accumulated amortization. We amortize the cost of identified intangible assets on a straight-line basis over the expected period of benefit, which is three years for customer relationships
and the contractual term for covenants not to compete, which range from five to ten years. In accordance with the guidance for impairment of long-lived assets in
ASC 360-10Property, Plant, and EquipmentOverall, we review intangible assets that have finite useful lives
when an event occurs indicating the potential for earlier impairment. We measure impairment losses related to long-lived assets based on the amount by which the carrying amounts of these
assets
exceed their fair values. We measure fair value under ASC 360-10, which is generally based on the sum of the undiscounted future cash flows.

Intangible
assets with an indefinite life consist of distribution rights with manufacturers. We classify distribution rights as indefinite lived intangible assets as our distribution
agreements continue indefinitely by their terms, or are routinely awarded or renewed without substantial cost to us or material modifications to the underlying agreements. As such, we believe that its
distribution agreements will contribute to cash flows for an indefinite period, therefore the carrying amount of distribution rights is not amortized. We test distribution rights for impairment
annually, or more frequently upon the occurrence of an event or when circumstances indicate that its carrying amount is greater than its fair value. The impairment test is performed by comparing the
carrying value to its fair value. Fair value is calculated by discounting the estimated future cash flows of the respective store or

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group
of stores associated with the business combination in which we obtained the distribution rights. As of January 31, 2011, the carrying value of our distribution rights was not considered
impaired.

Goodwill
represents the excess of costs over the fair value of the assets of businesses acquired not allocable to separately identifiable intangible assets. Goodwill acquired in business
combinations is assigned to its related reporting unit, which consist of our operating segments. Goodwill is not amortized, but is tested for impairment at the end of our fiscal year, or more
frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's carrying amount of goodwill is greater than its fair value. The goodwill impairment test is performed
by comparing the carrying value of the reporting unit to its fair value. Fair value is calculated by discounting the estimated future cash flows of our reporting units. As of January 31, 2011,
the carrying value of our goodwill was not considered impaired.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due
plus deferred taxes related primarily to differences between the basis of receivables, inventory, property and equipment, intangible assets, stock-based compensation, and accrued expenses for
financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Our policy is to recognize interest expense and penalties related to income tax matters within our provision for income taxes. We perform a
comprehensive review of our portfolio of uncertain tax positions in accordance with the requirements and recognition standards established by Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") 740,Income Taxes. Pursuant to this guidance, an uncertain tax position represents our expected treatment of a tax
position taken, or expected to be
taken, in a tax return, that has not been reflected in measuring income tax expense for financial reporting purposes.

Stock-Based Compensation

We account for stock-based compensation in accordance with the provisions of the ASC 718, CompensationStock Compensation. This
guidance requires that stock-based compensation, which includes stock options and restricted stock, be
accounted for at the fair value of the applicable equity instrument.

Business Combinations

We account for business combinations in accordance with the provisions of ASC 805,Business
Combinations. This guidance allows the acquirer to finalize the acquisition accounting during the measurement period, which may not exceed one year from the date of
acquisition. During the measurement period the Company's accounting for the business combination transaction may be based on estimates due to various unknown factors present at the date of
acquisition.

Key Financial Metrics

In addition to tracking our sales and expenses to evaluate our operational performance, we also monitor certain key financial metrics,
including absorption and same-store sales.

Absorption

Absorption is an industry term that refers to the percentage of an equipment dealer's fixed operating expense covered by the gross
margin of its combined parts and service businesses. Absorption in a given period is calculated by dividing our gross profit from parts and service sales in the period by the difference between
(i) our operating expenses (including interest on floorplan notes) and (ii) our

36

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variable
expense of sales commissions on equipment sales and incentive compensation in the same period. We believe that absorption is an important management metric because during economic down cycles
our customers tend to postpone new and used equipment purchases while continuing to run, maintain and repair their existing equipment. Thus, operating at a high absorption rate enables us to operate
profitably throughout economic down cycles. We measure and track absorption on a company-wide basis as well as on a per store basis. Our company-wide absorption rate was 75.0%,
75.4% and 75.7% for fiscal years 2011, 2010 and 2009, respectively.

Same-Store Sales

Same-store sales for any period represent sales by stores that were part of our company for the entire comparable period in
the preceding fiscal year. We do not distinguish relocated or newly-expanded stores in this same-store analysis. Closed stores are excluded from the same-store analysis. We
believe that tracking this metric is important to evaluating the success of the Titan Operating Model on a comparable basis.

Key Financial Statement Components

Revenue

Equipment.We derive equipment revenue from the sale of new and used agricultural and construction equipment.

Parts.We derive parts revenue from the sale of parts for equipment that we sell, as well as for other equipment makes. Our parts sales
provide us
with a relatively stable revenue stream that is less sensitive to the economic cycles that affect our equipment sales.

Services.We derive services revenue from maintenance and repair services to our customers' equipment. Our repair and maintenance
services provide a
high-margin, relatively stable source of revenue through changing economic cycles.

Other.We derive other revenue from equipment rentals and ancillary equipment support activities such as equipment transportation, GPS
signal
subscriptions and reselling finance and insurance products.

Cost of Revenue

Equipment.Cost of equipment revenue is the lower of the acquired cost or the market value of the specific piece of equipment sold.

Parts.Cost of parts revenue is the lower of the acquired cost or the market value of the parts sold, based on average costing.

Service.Cost of service revenue represents costs attributable to services provided for the maintenance and repair of customer-owned
equipment and
equipment then on-rent by customers.

Other.Costs of other revenue represent costs associated with equipment rental, providing transportation, hauling, parts freight, GPS
subscriptions
and damage waivers, including, among other items, drivers' wages, fuel costs, shipping costs and our costs related to damage waiver policies.

Operating Expenses

Our operating expenses include sales and marketing expenses, sales commissions (which generally are based upon equipment gross profit
margins), payroll and related benefit costs, insurance expenses,

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professional
fees, property rental and related costs, property and other taxes, administrative overhead, and depreciation associated with property and equipment (other than rental equipment).

Floorplan Interest

The cost of financing inventory is an important factor affecting our results of operations. Floorplan financing from CNH Capital and
our Credit Agreement represent the primary sources of financing for equipment inventories. CNH regularly offers interest-free periods as well as additional incentives and special offers.
As of January 31, 2011, approximately 48% of our floorplan notes payable was non-interest bearing.

Other Interest Expense

Interest expense represents the interest on our outstanding debt instruments, other than floorplan financing facilities.

Results of Operations

Comparative financial data for each of our four sources of revenue for fiscal 2011, 2010, and 2009 are expressed below. The results of
these periods include the operating results of the acquisitions made during these periods. The period-to-period comparisons included below are not necessarily indicative of
future results. Information regarding segment revenue and income (loss) before income taxes is presented for each period following our discussion of the consolidated results of operations. Additional
information regarding our segments is included in Note 16 of our audited financial statements.

Year Ended January 31,2011

2010

2009(dollars in thousands)EquipmentRevenue

$
855,443

$
643,186

$
540,307Cost of revenue


773,060


578,411


478,324Gross profit

$
82,383

$
64,775

$
61,983Gross profit margin


9.6
%

10.1
%

11.5
%PartsRevenue

$
140,982

$
119,509

$
94,984Cost of revenue


100,281


83,219


67,270Gross profit

$
40,701

$
36,290

$
27,714Gross profit margin


28.9
%

30.4
%

29.2
%ServiceRevenue

$
74,506

$
58,983

$
44,224Cost of revenue


27,767


21,615


16,729Gross profit

$
46,739

$
37,368

$
27,495Gross profit margin


62.7
%

63.4
%

62.2
%Other, including trucking and rentalRevenue

$
23,558

$
17,103

$
10,922Cost of revenue


18,813


14,441


8,245Gross profit

$
4,745

$
2,662

$
2,677Gross profit margin


20.1
%

15.6
%

24.5
%


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Table of Contents

The
following table sets forth our statements of operations data expressed as a percentage of revenue for the periods indicated.

Year Ended January 31,2011

2010

2009RevenueEquipment


78.2
%

76.8
%

78.2
%Parts


12.9
%

14.2
%

13.8
%Service


6.7
%

7.0
%

6.4
%Other, including trucking and rental


2.2
%

2.0
%

1.6
%Total revenue


100.0
%

100.0
%

100.0
%Total cost of revenue


84.1
%

83.2
%

82.6
%Gross profit


15.9
%

16.8
%

17.4
%Operating expenses


11.9
%

13.0
%

12.6
%Income from operations


4.0
%

3.8
%

4.8
%Other income (expense)


(0.6
)%

(0.6
)%

(0.4
)%Income before income taxes


3.4
%

3.2
%

4.4
%Provision for income taxes


(1.4
)%

(1.3
)%

(1.8
)%Net income


2.0
%

1.9
%

2.6
%


Fiscal Year Ended January 31, 2011 Compared to Fiscal Year Ended January 31, 2010

Consolidated Results

Revenue

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase

Percent
Change(dollars in thousands)Equipment

$
855,443

$
643,186

$
212,257


33.0
%Parts


140,982


119,509


21,473


18.0
%Service


74,506


58,983


15,523


26.3
%Other, including trucking and rental


23,558


17,103


6,455


37.7
%Total Revenue

$
1,094,489

$
838,781

$
255,708


30.5
%


The
increase in revenue was primarily due to acquisitions contributing to fiscal 2011 revenue and same-store sales growth. The acquired stores contributed
$68.6 million in additional total revenue, while the same-store sales growth contributed $187.1 million, an increase of 23.1% over the prior year. This revenue growth was
achieved in both our Agriculture and Construction segments.

Cost of Revenue

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase

Percent
Change(dollars in thousands)Equipment

$
773,060

$
578,411

$
194,649


33.7
%Parts


100,281


83,219


17,062


20.5
%Service


27,767


21,615


6,152


28.5
%Other, including trucking and rental


18,813


14,441


4,372


30.3
%Total cost of revenue

$
919,921

$
697,686

$
222,235


31.9
%


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Table of Contents

The
increase in cost of revenue was primarily due to increased revenue. Acquisitions contributed $58.1 million of the increase in total cost of revenue, while
same-store sales growth contributed $164.1 million. As a percentage of revenue, cost of revenue was 84.1% for fiscal 2011 compared to 83.2% for fiscal 2010.

Gross Profit

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase/
(Decrease)

Percent
Change(dollars in thousands)Gross ProfitEquipment

$
82,383

$
64,775

$
17,608


27.2
%Parts


40,701


36,290


4,411


12.2
%Service


46,739


37,368


9,371


25.1
%Other, including trucking and rental


4,745


2,662


2,083


78.2
%Total Gross Profit

$
174,568

$
141,095

$
33,473


23.7
%Gross Profit MarginEquipment


9.6
%

10.1
%

(0.5
)%

(5.0
)%Parts


28.9
%

30.4
%

(1.5
)%

(4.9
)%Service


62.7
%

63.4
%

(0.7
)%

(1.1
)%Other, including trucking and rental


20.1
%

15.6
%

4.5
%

28.8
%Total Gross Profit Margin


15.9
%

16.8
%

(0.9
)%

(5.4
)%Gross Profit MixEquipment


47.2
%

45.9
%

1.3
%

2.8
%Parts


23.3
%

25.7
%

(2.4
)%

(9.3
)%Service


26.8
%

26.5
%

0.3
%

1.1
%Other, including trucking and rental


2.7
%

1.9
%

0.8
%

42.1
%Total Gross Profit Mix


100.0
%

100.0
%

0.0
%

0.0
%


The
increase in gross profit was primarily due to increased revenue. Acquisitions contributed $10.5 million of the increase in total gross profit, while same-store
sale gross profits provided the remaining $23.0 million. Offsetting the positive effect to gross profits of higher revenue was compression on our equipment margins, which was caused by market
pricing pressures throughout much of fiscal 2011, but improved towards the end of the year due to increased market demand and an increase in the amount earned under manufacturer incentive programs, as
compared to the prior year.

Operating Expenses

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase

Percent
Change(dollars in thousands)Operating expenses

$
130,541

$
108,998

$
21,543


19.8
%Operating expenses as a percentage of revenue


11.9
%

13.0
%

(1.1
)%

(8.5
)%


The
increase in operating expenses was primarily due to the additional costs associated with acquisitions, such as compensation, rent, and depreciation. As a percentage of total revenue,
operating expenses decreased to 11.9% in fiscal 2011 as compared to 13.0% in fiscal 2010 due to improve fixed operating cost leverage resulting from higher revenues.

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Table of Contents

Other Income (Expense)

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase/
(Decrease)

Percent
Change(dollars in thousands)Interest and other income

$
1,794

$
1,843

$
(49
)

(2.7
)%Floorplan interest expense


(7,223
)

(5,485
)

1,738


31.7
%Interest expense


(1,361
)

(1,463
)

(102
)

(7.0
)%


Interest
and other income for the years ended January 31, 2011 and 2010 were positively impacted by a manufacturer incentive earned in both years. The increase in floorplan
interest expense of $1.7 million was due to the increase in floorplan notes payable balances as compared to fiscal 2010, offset by reductions in interest rates. We expect floorplan interest
expense in fiscal 2012 to be positively impacted by lower interest rates associated with our new Credit Agreement entered into on October 31, 2010.

Provision for Income Taxes

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase

Percent
Change(dollars in thousands)Provision for income taxes

$
14,895

$
11,255

$
3,640


32.3
%


Our
effective tax rate decreased from 41.7% in fiscal 2010 to 40.0% in fiscal 2011. The decrease in the effective tax rate from the prior year primarily reflects a decrease in the effect
of permanent differences between financial and income tax reporting, such as incentive stock options, and reconciliation of differences between estimates used in our fiscal 2010 income tax accrual and
actual amounts reported in our fiscal 2010 income tax return.

Segment Results

Fiscal Year Ended
January 31, 2011

Fiscal Year Ended
January 31, 2010

Increase/
(Decrease)

Percent
Change(dollars in thousands)RevenuesAgriculture

$
979,016

$
751,258

$
227,758


30.3
%Construction


152,646


116,361


36,285


31.2
%Segment revenues


1,131,662


867,619


264,043


30.4
%Eliminations


(37,173
)

(28,838
)

(8,335
)

(28.9
)%Total

$
1,094,489

$
838,781

$
255,708


30.5
%Income (Loss) Before Income TaxesAgriculture

$
44,083

$
36,133

$
7,950


22.0
%Construction


(3,451
)

(6,837
)

3,386


49.5
%Segment income (loss) before income taxes


40,632


29,296


11,336


38.7
%Shared Resources


(3,133
)

(2,120
)

(1,013
)

(47.8
)%Eliminations


(262
)

(184
)

(78
)

(42.4
)%Income before income taxes

$
37,237

$
26,992

$
10,245


38.0
%


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Table of Contents

Agriculture

Agriculture revenues for fiscal 2011 increased 30.3% compared to fiscal 2010. The revenue increase was primarily due to acquisitions
and an Agriculture same-store sales increase of 22.8% over fiscal 2010. The same-store sales growth was primarily caused by increased farm cash receipts and favorable harvest
conditions and crop yield reports across our footprint.

Agriculture
income before income tax increased 22.0% in fiscal 2011 primarily due to higher revenues. Offsetting the positive effect to gross profits of higher revenue was compression on
our equipment margins and higher floorplan interest expense, as compared to fiscal 2010. The compression on our equipment margins, which was caused by market pricing pressures throughout much of
fiscal 2011, improved towards the end of the year due to increased market demand and an increase in the amount earned under manufacturer incentive programs, as compared to the prior year. Floorplan
interest expense increased due to increased floorplan notes payable balances, partially offset by lower interest rates, compared to fiscal 2010. We expect floorplan interest expense in fiscal 2012 to
be positively impacted by lower interest rates associated with our new Credit Agreement entered into on October 31, 2010.

Construction

Fiscal 2011 Construction revenues increased 31.2% compared to fiscal 2010. The revenue increase was primarily due to new store openings
and a Construction same-store sales increase of 24.8% as compared to fiscal 2010. A major factor contributing to our increased revenue was the continued execution of our fiscal 2011
Construction business action plan, which included changing key Construction personnel and implementing the Titan Operating Model in the Construction stores acquired in fiscal 2009.

Loss
before income taxes decreased 49.5% primarily due to higher Construction segment gross profits resulting from increased revenues, offset by higher interest expense resulting from
increased long-term debt associated with rental fleet, as compared to fiscal 2010. Also contributing to the loss was $0.3 million in exit costs related to the closing of our store
in Columbia Falls, Montana. We expect interest expense in fiscal 2012 to be positively impacted by lower interest rates associated with our new Credit Agreement entered into on October 31,
2010.

Shared Resources/Eliminations

We incur centralized expenses/income at our general corporate level, which we refer to as "Shared Resources", and then allocate these
net expenses to our segments. Since these allocations are set early in the year, unallocated balances may occur.

Eliminations
remove any inter-company revenues or income before tax residing in our segment results.

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Table of Contents

Fiscal Year Ended January 31, 2010 Compared to Fiscal Year Ended January 31, 2009

Consolidated Results

Revenue

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Increase

Percent
Change(dollars in thousands)Equipment

$
643,186

$
540,307

$
102,879


19.0
%Parts


119,509


94,984


24,525


25.8
%Service


58,983


44,224


14,759


33.4
%Other, including trucking and rental


17,103


10,922


6,181


56.6
%Total Revenue

$
838,781

$
690,437

$
148,344


21.5
%


The
increase in revenue was primarily due to acquisitions contributing to fiscal 2010 revenue and same-store sales growth. The acquired stores contributed
$117.0 million in additional total revenue, while the same-store sales growth contributed $31.3 million, an increase of 4.9% over the prior year. The same-store
sales increase was driven by strong Agriculture segment sales offset by declines in our Construction segment. Revenue increases over the prior year in parts, service and other outpaced the increase in
equipment revenue primarily due to a weak construction equipment market in fiscal 2010.

Cost of Revenue

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Increase

Percent
Change(dollars in thousands)Equipment

$
578,411

$
478,324

$
100,087


20.9
%Parts


83,219


67,270


15,949


23.7
%Service


21,615


16,729


4,886


29.2
%Other, including trucking and rental


14,441


8,245


6,196


75.1
%Total cost of revenue

$
697,686

$
570,568

$
127,118


22.3
%


The
increase in cost of revenue was primarily due to increased revenue. Acquisitions contributed $97.7 million of the increase in total cost of revenue, while
same-store sales growth contributed $29.4 million. As a percentage of revenue, cost of revenue was 83.2% for fiscal 2010 compared to 82.6% for fiscal 2009.

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Table of Contents

Gross Profit

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Increase/
(Decrease)

Percent
Change(dollars in thousands)Gross ProfitEquipment

$
64,775

$
61,983

$
2,792


4.5
%Parts


36,290


27,714


8,576


30.9
%Service


37,368


27,495


9,873


35.9
%Other, including trucking and rental


2,662


2,677


(15
)

(0.6
)%Total Gross Profit

$
141,095

$
119,869

$
21,226


17.7
%Gross Profit MarginEquipment


10.1
%

11.5
%

(1.4
)%

(12.2
)%Parts


30.4
%

29.2
%

1.2
%

4.1
%Service


63.4
%

62.2
%

1.2
%

1.9
%Other, including trucking and rental


15.6
%

24.5
%

(8.9
)%

(36.3
)%Total Gross Profit Margin


16.8
%

17.4
%

(0.6
)%

(3.4
)%Gross Profit MixEquipment


45.9
%

51.7
%

(5.8
)%

(11.2
)%Parts


25.7
%

23.1
%

2.6
%

11.3
%Service


26.5
%

23.0
%

3.5
%

15.2
%Other, including trucking and rental


1.9
%

2.2
%

(0.3
)%

(13.6
)%Total Gross Profit Mix


100.0
%

100.0
%

0.0
%

0.0
%


The
increase in gross profit was primarily due to increased revenue, somewhat offset by lower equipment margins. Acquisitions contributed $19.3 million of the increase in total
gross profit, while same-store sale gross profits provided the remaining $1.9 million. Gross profit margins were 16.8% for fiscal 2010 compared to 17.4% for fiscal 2009. Fiscal 2009
Agriculture equipment margins were enhanced by a tight supply of equipment that did not recur in fiscal 2010. The return to more traditional supply conditions and inventory levels also resulted in
increased equipment inventory valuation charges over the prior year. Fiscal 2010 also included a reduced manufacturer market share incentive payment as compared to the prior year. The decrease in
"other" margins was primarily due to a lower utilization of rental fleet that resulted from a weak fiscal 2010 construction industry.

Operating Expenses

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Increase

Percent
Change(dollars in thousands)Operating Expenses

$
108,998

$
86,940

$
22,058


25.4
%Operating expenses as a percentage of revenue


13.0
%

12.6
%

0.4
%

3.2
%


The
increase in operating expenses was primarily due to the additional costs associated with acquisitions, such as compensation, rent, depreciation, travel and training. As a percentage
of total revenue, operating expenses increased slightly to 13.0% in fiscal 2010 as compared to 12.6% in fiscal 2009. This increase from the prior year was due to the increased number of stores in our
Construction segment, which have higher operating expenses as a percent of revenue, as well as lower revenues due to the challenging construction market, as compared to the same period of fiscal 2009.

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Table of Contents

Other Income (Expense)

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Increase

Percent
Change(dollars in thousands)Interest and other income

$
1,843

$
1,545

$
298


19.3
%Floorplan interest expense


(5,485
)

(3,240
)

2,245


69.3
%Interest expense


(1,463
)

(729
)

734


100.7
%


Interest
and other income increased $0.3 million as we received a manufacturer financing incentive in the fourth quarter of fiscal 2010, offset by a decrease in interest income
from investing our cash balances in highly secure investments in fiscal 2010 that carried lower interest rates than those earned in fiscal 2009. The increase in floorplan interest expense of
$2.2 million was due to the increase in floorplan notes payable balances as compared to fiscal 2009, as well as increased interest rates. The increase in interest expense of $0.7 million
resulted from higher long-term debt balances as compared to fiscal 2009.

Provision for Income Taxes

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Decrease

Percent
Change(dollars in thousands)Provision for income taxes

$
11,255

$
12,430

$
(1,175
)

(9.5
)%


Our
effective tax rate increased from 40.7% in fiscal 2009 to 41.7% in fiscal 2010. The increase in the effective tax rate from the prior year primarily reflects an increase in permanent
differences between financial and income tax reporting, such as the increase in stock option expense over the prior year.

Segment Results

Fiscal Year Ended
January 31, 2010

Fiscal Year Ended
January 31, 2009

Increase/
(Decrease)

Percent
Change(dollars in thousands)RevenuesAgriculture

$
751,258

$
624,035

$
127,223


20.4
%Construction


116,361


88,032


28,329


32.2
%Segment revenues


867,619


712,067


155,552


21.8
%Eliminations


(28,838
)

(21,630
)

(7,208
)

(33.3
)%Total

$
838,781

$
690,437

$
148,344


21.5
%Income (Loss) Before Income TaxesAgriculture

$
36,133

$
32,023

$
4,110


12.8
%Construction


(6,837
)

604


(7,441
)

(1232.0
)%Segment income (loss) before income taxes


29,296


32,627


(3,331
)

(10.2
)%Shared Resources


(2,120
)

(1,678
)

(442
)

(26.3
)%Eliminations


(184
)

(444
)

260


58.6
%Income before income taxes

$
26,992

$
30,505

$
(3,513
)

(11.5
)%


Agriculture

Fiscal 2010 Agriculture revenues increased 20.4% compared to fiscal 2009. The revenue increase was due to acquisitions and an
Agriculture same-store sales increase of 8.2% over fiscal 2009. Income

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before
income tax increased 12.8% due to increased revenues, which generated additional gross profits and greater fixed operating expense utilization compared to the prior year. These increases were
somewhat offset by lower Agriculture gross profit margins due to greater agriculture equipment supply and availability and a lower manufacturer market share incentive payment in the current year
compared to fiscal 2009.

Construction

Fiscal 2010 Construction revenues increased 32.2% compared to fiscal 2009. The revenue increase was due to acquisitions offset by a
Construction same-store sales decrease of 26.8% as compared to fiscal 2009. Both acquisition and same-store revenue were negatively impacted by a weak fiscal 2010 construction
market. The lower Construction revenue drove the $7.4 million decrease in income (loss) before income taxes through lower gross profits and lower fixed operating expense utilization.
Construction operating expense as a percent of sales was 23.7% in fiscal 2010 compared to 16.4% in fiscal 2009.

Shared Resources/Eliminations

We incur centralized expenses/income at our general corporate level, which we refer to as "Shared Resources", and then allocate these
net expenses to our segments. Since these allocations are set early in the year, unallocated balances may occur. The Shared Resources amount increased $0.4 in fiscal 2010 compared to the prior year.

Eliminations
remove any inter-company revenues or income before tax residing in our segment results.

Liquidity and Capital Resources

Cash Flow From Operating Activities

During fiscal 2011, cash flow used for operating activities was $35.0 million. Our cash flows from operations were primarily the
result of our reported net income of $22.3 million and non-cash adjustments to net income for depreciation and amortization of $9.0 million and a net increase in accounts
payable, customer deposits, accrued expenses and other long-term liabilities of $23.2 million. These operating cash inflows were principally offset by an increase in inventories of
$63.1 million, a net increase in receivables, prepaid expenses and other assets of $19.9 million and a net decrease in floorplan notes payable of $13.0 million. The increase in
inventories was primarily the result of our growth through acquisitions and inventory balances that reflect historical stocking levels.

During
fiscal 2010, cash flow used for operating activities was $47.7 million. Our cash flows from operations were primarily the result of our reported net income of
$15.7 million and non-cash adjustments to net income for depreciation and amortization of $8.0 million. These operating cash inflows were principally offset by an increase in
inventories of $61.2 million, a net decrease in accounts payable, customer deposits, accrued expenses and other long-term liabilities of $6.6 million and a net decrease in
floorplan notes payable of $3.7 million. The increase in inventories was primarily the result of our growth through acquisitions and inventory balances that reflect historical stocking levels.

During
fiscal 2009, cash flow provided by operating activities was $4.2 million. Our cash flows from operations were primarily the result of our reported net income of
$18.1 million, non-cash adjustments to net income for depreciation and amortization of $4.6 million, a net decrease in receivables, prepaid expenses and other assets of
$7.0 million, an increase in floorplan notes payable of $5.4 million and a net increase in accounts payable, customer deposits, accrued expenses and other long-term
liabilities of $3.8. These operating cash inflows were principally offset by an increase in inventories of $34.8 million.

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The
increase in inventories was primarily the result of our growth through acquisitions and purchasing to support our increased sales activity during fiscal 2009.

We
evaluate our cash flow from operating activities net of all floorplan activity and short-term advances related to customer contracts in transit. Taking these adjustments
into account, our non-GAAP cash flow provided by operating activities was $47.0 million, $4.6 million and $13.3 million, for fiscal 2011, 2010 and 2009, respectively.
For reconciliation of this non-GAAP financial measure, please see the Non-GAAP Cash Flow Reconciliation below.

Cash Flow From Investing Activities

During fiscal 2011, cash used for investing activities was $48.4 million. Our cash used for investing activities primarily
consisted of purchases of equipment dealerships (net of cash purchased) of $32.3 million and property and equipment purchases of $16.7 million.

During
fiscal 2010, cash provided by investing activities was $25.7 million. Our cash provided by investing activities primarily consisted of net sales of U.S. treasury bills of
$45.0 million, offset by purchases of equipment dealerships (net of cash purchased) of $7.3 million and property and equipment purchases of $12.4 million.

During
fiscal 2009, cash used for investing activities was $87.3 million. Our cash used for investing activities primarily consisted of net purchases of U.S. treasury bills of
$45.0 million following our follow-on common stock offering, purchases of equipment dealerships (net of cash purchased) of $35.5 million and property and equipment purchases
of $7.2 million.

Cash Flow From Financing Activities

During fiscal 2011, cash provided by financing activities was $83.4 million. Cash provided by financing activities was primarily
the result of an increase in our non-manufacturer floorplan notes payable of $82.4 million. During fiscal 2011, the increase in floorplan financing with
non-manufacturers resulted from borrowings under our new Credit Agreement.

During
fiscal 2010, cash provided by financing activities was $57.1 million. Cash provided by financing activities was primarily the result of an increase in our
non-manufacturer floorplan notes payable of $51.4 million and proceeds from long-term debt exceeding principal payments by $4.8 million. During fiscal 2010, we
increased our floorplan financing with
non-manufacturers in order to take advantage of the lower interest rates offered by these entities.

During
fiscal 2009, cash provided by financing activities was $81.3 million. Cash provided by financing activities was primarily the result of $78.8 million in net proceeds
from our follow-on offering and an increase in our non-manufacturer floorplan notes payable of $9.1 million. Partially offsetting these proceeds were principal payments
on long-term debt exceeding proceeds from long-term debt by $6.7 million.

Non-GAAP Cash Flow Reconciliation

Non-GAAP cash flow provided by (used for) operating activities is a non-GAAP financial measure which is
adjusted for the following:



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We
believe that the presentation of non-GAAP cash flow provided by (used for) operating activities is relevant and useful to our investors because it provides information on
activities we consider normal operations of our business, regardless of financing source. The following table reconciles net cash flow provided by (used for) operating activities, a GAAP measure, to
non-GAAP cash flow provided by operating activities and net cash provided by financing activities, a GAAP measure, to non-GAAP cash flow provided by financing activities (in
thousands):

As Reported

Adjustment
(1)

Adjustment
(2)

Non-GAAP
MeasuresFiscal 2011:Net cash provided by (used for) operating activities

$
(35,008
)
$
82,371

$
(392
)
$
46,971Net cash provided by financing activities


83,383


(82,371
)

392


1,404Fiscal 2010:Net cash provided by (used for) operating activities

$
(47,661
)
$
51,448

$
780

$
4,567Net cash provided by financing activities


57,069


(51,448
)

(780
)

4,841Fiscal 2009:Net cash provided by operating activities

$
4,215

$
9,094

$


$
13,309Net cash provided by financing activities


81,310


(9,094
)




72,216


(1)Net
change in non-manufacturer floorplan notes payable(2)Net
change in short-term advances related to customer contracts in transit


Debt Facilities

Senior Secured Credit Facility.We currently have a Credit Agreement with the Wells Fargo Bank Syndicate. The Credit Agreement provides
for a
$175.0 million wholesale floorplan line of credit (the "Floorplan Line") and a $50.0 million working capital line of credit (the "Working Capital Line"), both of which expire
October 31, 2014. The Credit Agreement has a variable interest rate on outstanding
balances of LIBOR plus an applicable margin of 1.5% to 2.0% per annum, depending upon our consolidated leverage ratio, has a 0.2% to 0.4% non-usage fee on the average monthly unused amount
and requires monthly payments of accrued interest. The Credit Agreement is secured by all our assets and contains certain financial covenants that impose a minimum level of fixed charge coverage ratio
and a maximum level of debt to tangible net worth ratio and includes annual thresholds for acquisitions and capital expenditures. The Credit Agreement also restricts our ability to pay cash dividends
to an amount not to exceed 50% of consolidated net income for the then trailing four quarters, so long as no default of event of default exists prior to or immediately following such action or
otherwise results from such action. The Credit Agreement became effective on November 2, 2010.

The
Floorplan Line is used to finance equipment inventory purchases. Amounts outstanding are recorded as floorplan notes payable, within current liabilities on the consolidated balance
sheets as we intend to repay amounts borrowed within one year. As of January 31, 2011 we had $117.4 million outstanding on the Floorplan Line.

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The
Working Capital Line is used to finance our working capital requirements. Amounts outstanding will be recorded as long-term debt, within long-term liabilities
on the consolidated balance sheets, as we do not have the intention or obligation to repay amounts borrowed within one year. As of January 31, 2011 we had $26.4 million outstanding on
the Working Capital Line.

CNH Capital Credit Facility.We currently have a credit facility with CNH Capital that provides for an aggregate principal balance of
up to
$300.0 million for floorplan financing, the availability of which is reduced by outstanding floorplan notes payable, rental fleet financing and other acquisition-related financing arrangements
with CNH Capital, as described below. Interest rates are currently equal to the prime rate plus 4% on new borrowings, subject to any interest-free periods offered by CNH Capital. The CNH
Capital term loans and loans for certain purposes have interest rates equal to the prime rate plus 4% per annum. Cumulative and unpaid balance of advances under the CNH Capital credit facility accrues
interest each month and requires monthly payments. The CNH Capital credit facility automatically renews on August 31 of each year through August 31, 2012, unless earlier terminated by
either party. The CNH Capital credit facility is secured by the financed assets. As of January 31, 2011, we had approximately $171.4 million outstanding on the CNH Capital credit
facility. The CNH Capital credit facility contains covenants that require the Company to maintain various financial ratio levels and to submit certain financial information. It also contains various
restrictive covenants that require the prior consent of CNH Capital if we desire to engage in any acquisition of, or consolidation or merger with, any other business entity in which we are not the
surviving company; create subsidiaries; move any collateral outside of the U.S.; or sell, rent, lease or otherwise dispose or transfer any of the collateral, other than in the ordinary course of
business. CNH's consent is also required for the acquisition of any CNH dealership. In addition, the CNH Capital credit facility restricts our ability to incur any liens upon any substantial part of
our assets.

Other Indebtedness with CNH Capital.CNH Capital periodically provides loans for fixed asset financing in connection with acquisitions.
Related to
this acquisition financing, we have various term loans with CNH Capital. The aggregate principal amount of these terms loans was approximately $0.2 million at January 31, 2011. We also
obtained variable rate notes at the prime rate plus 4% per annum from CNH Capital, which are secured by our designated rental fleet. The amount of our rental fleet notes as of January 31, 2011,
was $1.0 million.

Agricredit Credit Facility.We currently have a credit facility with Agricredit Acceptance LLC ("Agricredit") that provides for an
aggregate
principal balance of up to $75.0 million. The Agricredit credit facility may be used to purchase or refinance new and used equipment inventory. The interest rate on borrowings under the
Agricredit credit facility is equal to the three-month LIBOR rate plus 5.25%. The Agricredit credit facility allows for increase, decrease or termination of the credit facility by Agricredit on
90 days notice. Under covenants of the Agricredit credit facility, the Company has agreed, among other things, to maintain various financial ratio levels, to submit certain financial
information, and to obtain prior consent from Agricredit if the Company desires to engage in any acquisition meeting certain financial thresholds. The balances outstanding with Agricredit are secured
by the related inventory. Repayment terms vary by individual notes, but generally payments are made from sales proceeds or rental revenue from the related inventories.

Sources of Liquidity

Our primary sources of liquidity are cash reserves, cash flow from operations, proceeds from the issuance of debt and borrowings under
our credit facilities. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources.

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Adequacy of Capital Resources

Our primary uses of cash have been to fund our strategic acquisitions, finance the purchase of inventory, meet debt service
requirements and fund operating activities, working capital, payments due under building space operating leases and manufacturer floorplans payable. The primary factors affecting our ability to
generate cash and to meet existing, known or reasonably likely cash requirements are the timing and extent of acquisitions and our operating performance as impacted by (i) industry factors,
(ii) competition, (iii) general economic conditions and (iv) other business factors as identified in Item 1A "Risk Factors."

For
fiscal 2011 and 2010, our cash expenditures on property and equipment were $16.7 million and $12.4 million, respectively, exclusive of acquisitions, transfers between
equipment inventory and our designated rental fleet, and property and equipment purchased with long-term debt. Excluding cash expenditures on rental fleet equipment, cash expenditures on
property and equipment was $13.3 million in fiscal 2011. We expect our property and equipment expenditures, exclusive of acquisitions, for fiscal 2012 to be approximately $13.0 to
$15.0 million. The actual amount of our fiscal 2012 equipment expenditures will depend upon factors such as general economic conditions, growth prospects for our industry and our acquisition
activity. We currently expect to finance equipment purchases with borrowings under the existing credit facilities, with available cash or with cash flow from operations. We may need to incur
additional debt if we pursue any future acquisitions.

Our
ability to service our debt will depend upon our ability to generate the necessary cash. This will depend on our future acquisitions activity, operating performance, general economic
conditions, and financial, competitive, business and other factors, some of which are beyond our immediate control. Based on our current operational performance, we believe our cash flow from
operations, available cash and available borrowings under the existing credit facilities will adequately provide our liquidity needs for, at a minimum, the next 12 months.

We
cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available under the credit facilities with the Wells
Fargo Bank Syndicate and CNH Capital in amounts sufficient to allow us to service our indebtedness and to meet our other commitments. If we are unable to generate sufficient cash flow from operations
or to obtain sufficient future borrowings, we may be required to seek one or more alternatives such as refinancing or restructuring our indebtedness, selling material assets or operations or seeking
to raise additional debt or equity capital. We cannot assure you that we will be able to succeed with one of these alternatives on commercially reasonable terms, if at all. In addition, if we pursue
strategic acquisitions, we may require additional equity or debt financing to consummate the transactions, and we cannot assure you that we will succeed in obtaining this financing on favorable terms
or at all. If we incur additional indebtedness to finance any of these transactions, this may place increased demands on our cash flow from operations to service the resulting increased debt. Our
existing debt agreements contain restrictive covenants that may restrict our ability to adopt any of these alternatives. Any non-compliance by us under the terms of our debt agreements
could result in an event of default which, if not cured, could result in the acceleration of our debt.

Certain Information Concerning Off-Balance Sheet Arrangements

As of January 31, 2011, we did not have any relationships with unconsolidated entities or financial partnerships, such as
entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other
contractually narrow or limited purposes. We are, therefore, not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships. In the normal
course of our business activities, we lease rental equipment under operating leases.

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Contractual Obligation and Commercial Commitment Summary

Our contractual obligations and commercial commitments as of January 31, 2011 are summarized below:

Payments Due By PeriodContractual Obligations

Total

Less Than
1 Year

1 to 3 Years

3 to 5 Years

More Than
5 Years(in thousands)Long-term debt obligations(1)

$
41,097

$
5,303

$
6,420

$
28,965

$
409Operating lease(2)


80,168


11,305


20,132


18,302


30,429Other long-term liabilities(3)


3,595





3,595





Total

$
124,860

$
16,608

$
30,147

$
47,267

$
30,838


(1)Includes
obligations under notes payable issued in favor of our lenders and estimates of interest payable.(2)Includes
minimum lease payment obligations under operating leases related to our stores. Amounts do not include insurance or tax, which we include in our
operating expenses and which we estimate will be approximately $1.0 million for the less than 1 year period, $1.9 million for the 1-3 year period,
$1.8 million for the 3-5 year period, and $2.9 million for the more than 5 years period for a total of approximately $7.6 million. See Note 9 to
our audited financial statements for a description of our operating lease obligations.(3)Includes
long-term portion of trade payables.


New Accounting Pronouncements

In December 2010, the FASB amended authoritative guidance on business combinations, codified in ASC 805, Business Combinations. This
guidance clarifies that, when presenting comparative financial statements, registrants should disclose revenue and earnings
of the combined entity as though the current period business combinations had occurred as of the beginning of the comparable prior annual reporting period. The guidance also expands the supplemental
pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro
forma revenue and earnings. ASU 2010-29 is effective prospectively for material (either on an individual or aggregate basis) business combinations entered into in fiscal years beginning on
or after
December 15, 2010 with early adoption permitted. We adopted this guidance on February 1, 2011 and do not expect it to have a material impact on our consolidated financial statements.

In
December 2010, the FASB amended authoritative guidance on goodwill impairment testing, codified in ASC 305,IntangiblesGoodwill and
Other. This guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts, and requires performance of
Step 2 of the goodwill impairment test for such reporting units if it is more likely than not that, when considering qualitative factors, an impairment exists. We adopted this guidance on
February 1, 2011 and do not expect it to have a material impact on our consolidated financial statements.

In
July 2010, the FASB issued authoritative guidance on financing receivables and the allowance for credit losses, codified in ASC 310, Receivables. This guidance amends the current disclosure
requirements to provide a greater level of disaggregated information about the credit quality
of an entity's financing receivables and its allowance for credit losses. The guidance also requires an entity to disclose credit quality indicators, past due information, and modifications of its
financing receivables. We adopted this guidance in the quarter ended January 31, 2011. Its adoption did not have a material effect on our consolidated financial statements based on the nature
of our receivables.

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In
January 2010, the FASB issued authoritative guidance on fair value measurements, codified in ASC 820,Fair Value Measurements and
Disclosures. This guidance required additional disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements and activity in
Level 3 fair value measurements. It also clarified existing disclosure requirements regarding level of disaggregation and valuation inputs and techniques. The guidance is effective for interim
and annual reporting periods beginning after December 15, 2009, except for the disclosure of the Level 3 activity, which is effective for interim and fiscal years beginning after
December 15, 2010. We adopted these provisions on February 1, 2010, except for the Level 3 activity disclosures, which we adopted on February 1, 2011. The adoption of the
guidance did not have, and we do not expect the adoption of the Level 3 activity disclosures to have, a material impact on our consolidated financial statements.

In
October 2009, the FASB issued authoritative guidance on revenue recognition, codified in ASC 605-25,Revenue
Recognition. This guidance modifies the fair value requirements of revenue recognition on multiple element arrangements by allowing the use of the "best estimate of selling
price" in addition to vendor specific objective evidence and third-party evidence for determining the selling price of a deliverable. This guidance establishes a selling price hierarchy for
determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence, (b) third-party evidence, or (c) estimates. In addition, the guidance
eliminates the residual method of allocation and significantly expands the disclosure requirements for such arrangements. We adopted this guidance on February 1, 2011. Its adoption did not have
a material effect on our consolidated financial statements.

In
June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities ("VIEs"), codified in ASC 810, Consolidation.This guidance eliminates the exemption for
qualifying special-purpose entities, amends the approach companies use to identify the VIEs
for which they are deemed to be the primary beneficiary and are required to consolidate, and requires additional disclosure of an entity's involvement with a VIE. The guidance requires companies to
perform ongoing reassessments of whether it is the primary beneficiary of a VIE. This assessment no longer includes the quantitative-based assessment, and instead requires a qualitative assessment of
whether a company has the power to direct the VIE's activities that most significantly impact the company's economic performance and whether the entity has the obligation to absorb losses or the right
to receive benefits that could be significant to the VIE. We adopted this guidance on February 1, 2010. Its adoption did not have a material effect on our consolidated financial statements.

In
April 2009, the FASB issued authoritative guidance on the accounting and disclosure of assets acquired and liabilities assumed in a business combination that arise from contingencies,
and subsequent accounting for these contingencies. This guidance was codified in ASC 805,Business Combinations. We adopted this guidance on
February 1, 2010. Its adoption did not have a material effect on our consolidated financial statements based on the nature of the assets acquired and liabilities assumed in our business
combinations.

Information Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Such "forward-looking"
information is included in this Form 10-K, including this Item 7, as well as in other materials filed or to be filed by us with the Securities and Exchange Commission (as
well as information included in oral statements or other written statements made or to be made by the Company).

This
Form 10-K contains forward-looking statements that involve risks and uncertainties. In some cases, you can identify forward-looking statements by the following
words: "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "ongoing," "plan," "potential," "predict," "project," "should," "will," "would," or the negative of these
terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve known and

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unknown
risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from the information
expressed or implied by these forward-looking statements. Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management's beliefs
and
assumptions, which in turn are based on currently available information. Our forward-looking statements in this Form 10-K generally relate to the
following:



Forward-looking
statements are only predictions and are not guarantees of performance. These statements are based on our management's beliefs and assumptions, which in turn are based on
currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our products, the expansion of product
offerings geographically, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking
statements also involve known and unknown risks and uncertainties, which could cause actual results that differ materially from those contained in any forward-looking statement. Many of these factors
are beyond our ability to control or predict. Such factors include, but are not limited to, the following:



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You
should read the risk factors and the other cautionary statements made in this Form 10-K as being applicable to all related forward-looking statements wherever they
appear in this Form 10-K. We cannot assure you that the forward-looking statements in this Form 10-K will prove to be accurate. Furthermore, if our
forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements
as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, if at all. Other than as required by law, we undertake no
obligation to update these forward-looking statements, even though our situation may change in the future.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates. Market risk is the potential loss arising from adverse changes in market
rates and prices such as interest rates. For fixed rate debt, interest rate changes affect the fair value of financial instruments but do not impact earnings or cash flows. Conversely, for floating
rate debt, interest rate changes generally do not affect the fair market value but do impact future earnings and cash flows, assuming other factors are held constant. We have both fixed and floating
rate financing. Some of our floating rate credit facilities contain minimum rates of interest to be charged. Based upon balances and interest rates as of January 31, 2011, holding other
variables constant, a one percentage point increase in interest rates for the next 12-month period would decrease pre-tax earnings and cash flow by approximately
$2.0 million. Conversely, a one percentage point decrease in interest rates for the next 12-month period would result in an increase to pre-tax earnings and cash flow of
approximately $2.0 million. At January 31, 2011, we had variable rate floorplan notes payable of $320.8 million, of which approximately $166.8 million was interest-bearing,
variable notes payable and long-term debt of $28.6 million, and fixed rate notes payable and long-term debt of $9.0 million.

Our
policy is not to enter into derivatives or other financial instruments for trading or speculative purposes.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Balance Sheets of the Company as of January 31, 2011 and 2010, and the related Consolidated Statements of
Operations, Stockholders' Equity, and Cash Flows for each of the three years in the period ended January 31, 2011, and the notes thereto have been audited by Eide Bailly LLP, independent
registered public accounting firm.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



PageTitan Machinery Inc.Financial StatementsAudited Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm


56Report of Independent Registered Public Accounting Firm


57Consolidated Balance Sheets as of January 31, 2011 and 2010


58Consolidated Statements of Operations for the fiscal years ended January 31, 2011, 2010 and 2009


59Consolidated Statements of Stockholders' Equity for the fiscal years ended January 31, 2011, 2010 and 2009


60Consolidated Statements of Cash Flows for the fiscal years ended January 31, 2011, 2010 and 2009


61Notes to Consolidated Financial Statements


63


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Stockholders
Titan Machinery Inc.
Fargo, North Dakota

We
have audited the accompanying consolidated balance sheets of Titan Machinery Inc. as of January 31, 2011 and 2010, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year period ended January 31, 2011, and the financial statement schedule listed in the Index at
Item 15. Titan Machinery Inc.'s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these financial statements based on our
audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Titan Machinery Inc. as of January 31,
2011 and 2010, and the results of its operations and its cash flows for each of the years in the three-year period ended January 31, 2011, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the financial statement schedule referred to above, when considered in relation to the consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set forth therein.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Titan Machinery Inc.'s internal control over financial reporting
as of January 31, 2011, based on criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO),
and our report dated April 18, 2011, expressed an unqualified opinion.

/s/
Eide Bailly LLP

Minneapolis,
Minnesota
April 18, 2011

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Stockholders
Titan Machinery Inc.
Fargo, North Dakota

We
have audited Titan Machinery Inc.'s internal control over financial reporting as of January 31, 2011, based on criteria established in Internal ControlIntegrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Titan Machinery Inc.'s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial
Reporting. Our responsibility is to express an opinion on the company's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.

A
company's internal control over financial reporting is a process 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. A company's internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) 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.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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.

In
our opinion, Titan Machinery Inc. maintained, in all material respects, effective internal control over financial reporting as of January 31, 2011, based on criteria
established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We
have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets and the related consolidated
statements of operations, stockholders' equity, and cash flows of Titan Machinery Inc., and our report dated April 18, 2011, expressed an unqualified opinion.

/s/
Eide Bailly LLP

Minneapolis,
Minnesota
April 18, 2011

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TITAN MACHINERY INC.        CONSOLIDATED BALANCE SHEETS        JANUARY 31, 2011 AND 2010        (in thousands, except per share data)

January 31,
2011

January 31,
2010ASSETSCURRENT ASSETSCash and cash equivalents

$
76,112

$
76,185Receivables, net


44,945


22,254Inventories


429,844


347,580Prepaid expenses


1,003


1,009Income taxes receivable





1,595Deferred income taxes


3,247


2,266Total current assets


555,151


450,889INTANGIBLES AND OTHER ASSETSNoncurrent parts inventories


2,405


1,642Goodwill


18,391


14,762Intangible assets, net of accumulated amortization


4,734


295Other


2,793


62028,323


17,319PROPERTY AND EQUIPMENT, net of accumulated depreciation


65,372


46,604$
648,846

$
514,812LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable

$
15,957

$
12,352Floorplan notes payable


320,801


249,872Current maturities of long-term debt and short-term advances


4,207


7,218Customer deposits


28,180


12,974Accrued expenses


16,816


9,870Income taxes payable


2,093


Total current liabilities


388,054


292,286LONG-TERM LIABILITIESLong-term debt, less current maturities


33,409


21,852Deferred income taxes


9,012


6,356Other long-term liabilities


3,814


3,79446,235


32,002STOCKHOLDERS' EQUITYCommon stock, par value $.00001 per share, authorized25,000 shares; issued and outstanding17,917 at January 31, 2011 and 17,777 at
January 31, 2010





Additional paid-in-capital


140,466


138,775Retained earnings


74,091


51,749214,557


190,524$
648,846

$
514,812


See
Notes to Consolidated Financial Statements

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TITAN MACHINERY INC.        CONSOLIDATED STATEMENTS OF OPERATIONS        YEARS ENDED JANUARY 31, 2011, 2010 AND 2009        (in thousands, except per
share data)

2011

2010

2009REVENUEEquipment

$
855,443

$
643,186

$
540,307Parts


140,982


119,509


94,984Service


74,506


58,983


44,224Other, including trucking and rental


23,558


17,103


10,922TOTAL REVENUE


1,094,489


838,781


690,437COST OF REVENUEEquipment


773,060


578,411


478,324Parts


100,281


83,219


67,270Service


27,767


21,615


16,729Other, including trucking and rental


18,813


14,441


8,245TOTAL COST OF REVENUE


919,921


697,686


570,568GROSS PROFIT


174,568


141,095


119,869OPERATING EXPENSES


130,541


108,998


86,940INCOME FROM OPERATIONS


44,027


32,097


32,929OTHER INCOME (EXPENSE)Interest and other income


1,794


1,843


1,545Floorplan interest expense


(7,223
)

(5,485
)

(3,240
)Interest expense other


(1,361
)

(1,463
)

(729
)INCOME BEFORE INCOME TAXES


37,237


26,992


30,505PROVISION FOR INCOME TAXES


(14,895
)

(11,255
)

(12,430
)NET INCOME

$
22,342

$
15,737

$
18,075EARNINGS PER SHARENOTE 1EARNINGS PER SHAREBASIC

$
1.27

$
0.89

$
1.11EARNINGS PER SHAREDILUTED

$
1.23

$
0.88

$
1.08WEIGHTED AVERAGE SHARESBASIC


17,658


17,593


16,291WEIGHTED AVERAGE SHARESDILUTED


18,146


17,968


16,779


See
Notes to Consolidated Financial Statements

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TITAN MACHINERY INC.        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY        YEARS ENDED JANUARY 31, 2011, 2010 AND 2009        (in thousands)

Common StockShares
Outstanding

Amount

Additional
Paid-In
Capital

Retained
Earnings

TotalBALANCE, JANUARY 31, 2008


13,441

$


$
58,180

$
17,937

$
76,117Common stock issued in follow-on offering


4,180





78,815





78,815Common stock issued on grant of restricted stock and exercise of stock options and warrants


36





68





68Stock-based compensation expense








692





692Net income











18,075


18,075BALANCE, JANUARY 31, 2009


17,657





137,755


36,012


173,767Common stock issued on grant of restricted stock and exercise of stock options and warrants


120





58





58Stock-based compensation expense








962





962Net income











15,737


15,737BALANCE, JANUARY 31, 2010


17,777





138,775


51,749


190,524Common stock issued on grant of restricted stock and exercise of stock options and warrants and tax benefits of equity awards


140





534





534Stock-based compensation expense








1,157





1,157Net income











22,342


22,342BALANCE, JANUARY 31, 2011


17,917

$


$
140,466

$
74,091

$
214,557


See
Notes to Consolidated Financial Statements

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TITAN MACHINERY INC.        CONSOLIDATED STATEMENTS OF CASH FLOWS        YEARS ENDED JANUARY 31, 2011, 2010 AND 2009        (in thousands)

2011

2010

2009OPERATING ACTIVITIESNet income

$
22,342

$
15,737

$
18,075Adjustments to reconcile net income to net cash provided by (used for) operating activitiesDepreciation and amortization


8,969


7,950


4,583Deferred income taxes


1,675


1,850


968Stock-based compensation expense


1,157


962


692Other


(111
)

(15
)

(9
)Changes in assets and liabilities, net of purchase of equipment dealerships assets and assumption of liabilitiesReceivables, prepaid expenses and other assets


(19,873
)

(2,481
)

6,993Inventories


(63,108
)

(61,244
)

(34,842
)Floorplan notes payable


(12,992
)

(3,660
)

5,380Accounts payable, customer deposits, accrued expenses and other long-term liabilities


23,245


(6,649
)

3,833Income taxes


3,688


(111
)

(1,458
)NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES


(35,008
)

(47,661
)

4,215INVESTING ACTIVITIESNet change in U.S. treasury bills





44,994


(44,994
)Property and equipment purchases


(16,732
)

(12,394
)

(7,228
)Net proceeds from sale of equipment


892


396


462Purchase of equipment dealerships, net of cash purchased


(32,312
)

(7,266
)

(35,521
)Other, net


(296
)




NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES


(48,448
)

25,730


(87,281
)FINANCING ACTIVITIESProceeds from follow-on offering of common stock, net of underwriting discount of $4,389 and other direct costs of $396








78,815Net change in non-manufacturer floorplan notes payable


82,371


51,448


9,094Short-term advances related to customer contracts in transit, net


(392
)

780


Proceeds from long-term debt borrowings


23,259


23,914


12,368Principal payments on long-term debt and subordinated debentures


(20,385
)

(19,066
)

(19,034
)Debt issuance costs


(2,004
)

(65
)

Proceeds from exercise of stock options and warrants, and tax benefits of equity awards


534


58


67NET CASH PROVIDED BY FINANCING ACTIVITIES


83,383


57,069


81,310NET CHANGE IN CASH AND CASH EQUIVALENTS


(73
)

35,138


(1,756
)CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


76,185


41,047


42,803CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
76,112

$
76,185

$
41,047


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Table of Contents

TITAN MACHINERY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

YEARS ENDED JANUARY 31, 2011, 2010 AND 2009

(in thousands)



2011

2010

2009SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during the periodIncome taxes, net of refunds

$
9,226

$
10,287

$
12,894Interest

$
9,103

$
6,311

$
4,037SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIESProperty and equipment purchased with long-term debt

$
2,980

$
2,312

$
979Net transfer of equipment from (to) fixed assets to (from) inventories

$
(3,219
)
$
6,528

$
(3,631
)Net transfer of financing from (to) long-term debt to (from) floorplan notes payable

$
(3,084
)
$
3,180

$
Acquisition of equipment dealership assets in exchange for cash and assumption of liabilities including purchase accounting adjustments on prior
acquisitionsReceivables

$
(2,812
)
$
(558
)
$
(4,905
)Inventories


(21,241
)

(15,189
)

(42,594
)Deferred income taxes, net





163


271Property and equipment


(5,512
)

(1,462
)

(22,255
)Intangible assets


(4,387
)




(250
)Other assets








(89
)Goodwill


(3,629
)

(2,298
)

(4,193
)Accounts payable





(149
)

3,367Floorplan notes payable


2,737


8,765


24,608Customer deposits


1,868


286


392Accrued expenses


207


205


290Income taxes payable





(51
)

1,100Long-term debt





1,877


8,084Non-cash consideration: other long-term liabilities


457


1,145


653Cash paid for dealerships, net of cash purchased and adjustments on prior acquisitions

$
(32,312
)
$
(7,266
)
$
(35,521
)


See Notes to Consolidated Financial Statements

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Table of Contents



TITAN MACHINERY INC.        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Titan Machinery Inc. (the "Company") is engaged in the retail sale, service and rental of agricultural and construction machinery
through stores in North Dakota, South Dakota, Minnesota, Iowa, Nebraska, Montana and Wyoming.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Transportation Solutions,
LLC. All significant accounts, transactions and profits between the consolidated companies have been eliminated in consolidation.

Reclassifications

Certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements to
maintain consistency and comparability between periods presented.

Concentrations of Credit Risk

The Company's sales are to agricultural and construction equipment customers principally in North Dakota, South Dakota, Minnesota,
Iowa, Nebraska, Montana and Wyoming. The Company extends credit to its customers in the ordinary course of business and monitors its customers' financial condition to minimize its risks associated
with trade receivables; however, the Company does not generally require collateral on trade receivables.

A
portion of the Company's cash balances are maintained in bank deposit accounts, which are in excess of federally insured limits.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, particularly related to realization of inventory,
initial valuation and impairment analyses of intangible assets, and income taxes.

Concentrations in Operations

The Company currently purchases new and rental equipment and related parts from a limited number of manufacturers. Although no change
in suppliers is anticipated, the occurrence of such a change could cause a possible loss of sales and adversely affect operating results. The Company is the holder of authorized dealerships granted by
CNH Capital LLC, New Holland North America, Inc. and Kobelco Construction Machinery America LLC whereby it has the right to act as an authorized dealer for the entities' equipment. The dealership
authorizations and floorplan facilities can be cancelled by the respective entity if the Company does not observe certain established guidelines and covenants.

63

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash, Cash Equivalents and U.S. Treasury Bills

The Company considers all highly liquid investments with original maturities of three months or less on their acquisition date to be
cash equivalents. As of January 31, 2011, cash equivalents consisted entirely of money market funds. As of January 31, 2010, cash equivalents consisted entirely of money market funds and
U.S. Treasury Bills. The Treasury Bills are classified as held-to-maturity as the Company had both the positive intent and ability to hold to maturity, and were carried at
amortized cost, which due to the short-term nature of the investments, approximated fair value.

Receivables and Credit Policy

Trade accounts receivable due from customers are uncollateralized customer obligations due under normal trade terms requiring payment
within 30 days from the invoice date. Balances unpaid after 30 days are considered past due and begin to accrue interest. Payments of trade receivables are allocated to the specific
invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. Trade accounts receivable due from manufacturers relate to discount programs,
incentive programs and repair services performed on equipment with a remaining factory warranty. Trade accounts receivable due from finance companies primarily consist of contracts in transit with
finance companies and balances due from credit card
companies. These receivables do not generally have established payment terms but are collected in relatively short time periods.

The
carrying amount of trade receivables is reduced by a valuation allowance that reflects management's best estimate of the amounts that will not be collected. Management reviews aged
receivable balances and estimates the portion, if any, of the balance that will not be collected. Account balances are charged off after all appropriate means of collection have been exhausted and the
potential for recovery is considered remote.

Inventories

New and used equipment are stated at the lower of cost (specific identification) or market value with adjustments for decreases in
market value on inventory rented but available for sale being a percentage of the rental income received on such inventory. All used equipment inventories and certain new equipment inventories
including that which has been rented, is subject to periodic lower of cost or market evaluation. Parts inventories are valued at the lower of average cost or market value. An estimate of parts
inventories not expected to be sold in the next year has been reported separately, which is based on historical sales of parts on hand. Work in process is valued at the retail rates of labor incurred
and parts inventories used on service work in process at year end.

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation. Depreciation is computed on a straight-line basis
over the estimated useful life of each asset, as summarized below:

Buildings and leasehold improvements

Lesser of 10  40 years or lease termMachinery and equipment

3  10 yearsFurniture and fixtures

3  10 yearsVehicles

5  10 yearsRental fleet

3  10 years


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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Depreciation
for income tax reporting purposes is computed using accelerated methods.

The
Company completes an evaluation, at each balance sheet date, whether or not events or circumstances have taken place to indicate that the remaining net book value of the assets may
be unrecoverable. If necessary, the estimated future undiscounted cash flows of any assets in question are compared to their net book value to determine if an adjustment to the recorded value is
necessary.

Goodwill

Goodwill represents the excess of purchase price over the fair value of the assets of businesses acquired, including other identifiable
intangible assets. Goodwill acquired in business combinations is assigned to its related reporting unit, which consists of the Company's operating segments.

Goodwill
is not amortized, but is tested for impairment at the end of the Company's fiscal year, or more frequently upon the occurrence of an event or when circumstances indicate that a
reporting unit's carrying amount of goodwill is greater than its fair value. The goodwill impairment test is performed by comparing the carrying value of the reporting unit to its fair value. Fair
value is calculated by discounting the estimated future cash flows of the Company's reporting units based on recently prepared operating forecasts. As of January 31, 2011, the carrying value of
the Company's goodwill was not considered impaired.

Intangible Assets

Intangible assets with a finite life consist of customer relationships and covenants not to compete, and are carried at cost less
accumulated amortization. The Company amortizes the cost of identified intangible assets on a straight-line basis over the expected period of benefit, which is three years for customer
relationships and the contractual term for covenants not to compete, which range from five to ten years. In accordance with the guidance for impairment of long-lived assets in Financial
Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 360-10Property, Plant, and
EquipmentOverall, the Company reviews intangible assets that have finite useful lives when an event occurs indicating the potential for earlier impairment. The
Company measures impairment losses related to long-lived assets based on the amount by which the carrying amounts of these assets exceed their fair values. The Company measures fair value
under ASC 360-10, which is generally based on the sum of the undiscounted future cash flows.

Intangible
assets with an indefinite life consist of distribution rights with manufacturers. The Company classifies distribution rights as indefinite lived intangible assets as our
distribution agreements continue indefinitely by their terms, or are routinely awarded or renewed without substantial cost to us or material modifications to the underlying agreements. As such, the
Company believes that its distribution agreements will contribute to cash flows for an indefinite period, therefore the carrying amount of distribution rights is not amortized. The Company tests
distribution rights for impairment annually, or more frequently upon the occurrence of an event or when circumstances indicate that its carrying amount is greater than its fair value. The impairment
test is performed by comparing the carrying value to its fair value. Fair value is calculated by discounting the estimated future cash flows of the respective store or group of stores associated with
the business combination in which we obtained
the distribution rights. As of January 31, 2011, the carrying value of the Company's distribution rights was not considered impaired.

65

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Customer Deposits

Customer deposits consist of advance payments from customers, in the form of cash or equipment to be traded-in, for revenue
to be recognized in the following year.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due
plus deferred taxes related primarily to differences between the basis of receivables, inventory, property and equipment, intangible assets, stock-based compensation, and accrued expenses for
financial and income tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. The Company's policy is to recognize interest expense and penalties related to income tax matters within its provision for income taxes. The Company
performs a comprehensive review of its portfolio of uncertain tax positions in accordance with the requirements and recognition standards established by ASC 740,Income
Taxes. Pursuant to this guidance, an uncertain tax position represents the Company's expected treatment of a tax position taken, or expected to be taken, in a tax return, that
has not been reflected in measuring income tax expense for financial reporting purposes.

Earnings Per Share

Basic earnings per share were computed by dividing net income by the weighted-average number of shares of common stock outstanding
during the year.

Diluted
earnings per share were computed by dividing net income by the weighted-average shares of common stock outstanding after adjusting for potential dilution related to the
conversion of all dilutive securities into common stock. All potentially dilutive securities were included in the computation of diluted earnings per share. There were 131,000, 139,000 and 134,000
options outstanding as of January 31, 2011, 2010 and 2009, respectively, which were not included in the computation of diluted earnings per share because they were anti-dilutive.

The
following table sets forth the denominator for the computation of basic and diluted earnings per share:

2011

2010

2009(in thousands)Basic weighted-average shares outstanding


17,658


17,593


16,291Plus: Incremental shares from assumed conversionsRestricted stock


185


140


87Warrants


53


70


109Stock options


250


165


292Diluted weighted-average shares outstanding


18,146


17,968


16,779


66

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

Revenue on equipment is recognized upon receipt of a signed contract and delivery of product to customers. Revenue on parts sales is
recognized upon delivery of product to customers. Rental and service revenue is recognized at the time the related services are provided. In addition to outright sales of new and used equipment,
certain rental agreements may include rent-to-purchase options. Under these agreements, customers are given a period of time to exercise an option to purchase the related
equipment, with a portion of the rental payments being applied to the purchase price. Any such equipment is included in inventory until the purchase option is exercised. Payments received during the
rental period are recorded as customer deposits, with equipment sales revenue being recognized upon the exercise of the purchase option.

Sales Taxes

The Company has customers in states and municipalities in which those governmental units impose a sales tax on certain sales. The
Company collects those sales taxes from its customers and remits the entire amount to the various governmental units. The Company's accounting policy is to exclude the tax collected and remitted from
revenue and cost of revenue.

Shipping and Handling Costs

Shipping and handling costs are recorded as cost of revenue and amounts billed to customers for shipping and handling costs are
recorded in revenue.

Manufacturer Incentives and Discounts

The Company receives various manufacturer incentives and discounts, which are based on a variety of factors. The Company accounts for
such programs in accordance with the provisions of ASC 605-50,Customer's Accounting for Certain Consideration Received from a
Vendor. Discounts and incentives related to the purchase of inventory are recognized as a reduction of inventory prices and recognized as a reduction of cost of revenue when
the related inventory is sold. Sales-related discounts and incentives are recognized as a reduction of cost of
revenue when the related inventory is sold. Financing-related incentives are recognized as other income when earned. Other incentives, reflecting reimbursement of qualifying expenses, are recognized
as a reduction of the related expense when earned.

Advertising Costs

Costs incurred for producing and distributing advertising are expensed as incurred. Advertising expense amounted to
$3.0 million, $2.6 million and $2.3 million, respectively, for the years ended January 31, 2011, 2010 and 2009.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, CompensationStock Compensation.
This guidance requires that stock-based compensation, which includes stock options and restricted stock, be
accounted for at the fair value of the applicable equity instrument. Additional information regarding stock-based compensation is summarized in Note 12.

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

Business Combinations

The Company accounts for business combinations in accordance with the provisions of ASC 805,Business
Combinations. This guidance allows the acquirer to finalize the acquisition accounting during the measurement period, which may not exceed one year from the date of
acquisition. During the measurement period the Company's accounting for the business combination transaction may be based on estimates due to various unknown factors present at the date of
acquisition.

Segment Reporting

The Company operates its business in two operating segments, the Agriculture segment and Construction segment, in accordance with the
provisions of ASC 280,Segment Reporting. Information regarding these segments is summarized in Note 16.

Exit and Disposal Costs

The Company accounts for exit or disposal activities, including store closures, in accordance with ASC 420, Exit or Disposal Cost
Obligations.Such costs mainly include lease termination costs and employee termination costs. The Company records a liability for
any remaining lease obligations, net of estimated sublease income, or estimated loss on disposal if the Company buys and subsequently sells the leased property, as of the date the Company ceases using
the property. Any subsequent adjustments to that liability as a result of changes in estimates are recorded in the period incurred. The Company records a liability for employee termination costs at
the date the termination benefits were communicated to the employees.

As
part of the Company's Construction business action plan, in April 2010, the Company decided to close its Construction store in Columbia Falls, Montana. The primary exit costs relate
to estimated lease termination costs of $0.3 million and employee termination costs of $27,000. These exit costs are included in operating expenses on the consolidated statement of operations
for the year ended January 31, 2011. The Company transferred the majority of the assets and related floorplan notes payable and long-term debt to other stores. A reconciliation of
the beginning and ending liability balance follows:

(in thousands)Balance at January 31, 2010

$
Exit costs incurred and charged to expense


333Exit costs paid


(126
)Balance at January 31, 2011

$
207


Recent Accounting Guidance

In December 2010, the FASB amended authoritative guidance on business combinations, codified in ASC 805, Business Combinations. This
guidance clarifies that, when presenting comparative financial statements, registrants should disclose revenue and earnings
of the combined entity as though the current period business combinations had occurred as of the beginning of the comparable prior annual reporting period. The guidance also expands the supplemental
pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

attributable
to the business combination included in the reported pro forma revenue and earnings. ASU 2010-29 is effective prospectively for material (either on an individual or aggregate
basis) business combinations entered into in fiscal years beginning on or after December 15, 2010 with early adoption permitted. The Company adopted this guidance on February 1, 2011 and
does not expect it to have a material impact on the Company's consolidated financial statements.

In
December 2010, the FASB amended authoritative guidance on goodwill impairment testing, codified in ASC 305,IntangiblesGoodwill and
Other. This guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts, and requires performance of
Step 2 of the goodwill impairment test for such reporting units if it is more likely than not that, when considering qualitative factors, an impairment exists. The Company adopted this guidance
on February 1, 2011 and does not expect it to have a material impact on the Company's consolidated financial statements.

In
July 2010, the FASB issued authoritative guidance on financing receivables and the allowance for credit losses, codified in ASC 310, Receivables. This guidance amends the current disclosure
requirements to provide a greater level of disaggregated information about the credit quality
of an entity's financing receivables and its allowance for credit losses. The guidance also requires an entity to disclose credit quality indicators, past due information, and modifications of its
financing receivables. The Company adopted this guidance in the quarter ended January 31, 2011. Its adoption did not have a material effect on the Company's consolidated financial statements
based on the nature of its receivables.

In
January 2010, the FASB updated authoritative guidance on fair value measurements, codified in ASC 820,Fair Value Measurements and
Disclosures. This guidance required additional disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements and activity in
Level 3 fair value measurements. It also clarified existing disclosure requirements regarding level of disaggregation and valuation inputs and techniques. The guidance is effective for interim
and annual reporting periods beginning after December 15, 2009, except for the disclosure of the Level 3 activity, which is effective for interim and fiscal years beginning after
December 15, 2010. The Company adopted these provisions on February 1, 2010, except for the Level 3 activity disclosures, which the Company adopted on February 1, 2011. The
adoption of the guidance did not have, and the Company does not expect the adoption of the Level 3 activity disclosures to have, a material impact on the Company's consolidated financial
statements.

In
October 2009, the FASB issued authoritative guidance on revenue recognition, codified in ASC 605-25,Revenue
Recognition. This guidance modifies the fair value requirements of revenue recognition on multiple element arrangements by allowing the use of the "best estimate of selling
price" in addition to vendor specific objective evidence and third-party evidence for determining the selling price of a deliverable. This guidance establishes a selling price hierarchy for
determining the selling price of a deliverable, which is based on: (a) vendor-specific objective evidence, (b) third-party evidence, or (c) estimates. In addition, the guidance
eliminates the residual method of allocation and significantly expands the disclosure requirements for such arrangements. The Company adopted this guidance on February 1, 2011. Its adoption did
not have a material effect on the Company's consolidated financial statements.

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities ("VIE"), codified in ASC 810, Consolidation.This guidance eliminates the exemption for qualifying special-purpose entities, amends the approach companies use to identify the VIEs
for which they are deemed to be the primary beneficiary and are required to consolidate, and requires additional disclosure of an entity's involvement with a VIE. The guidance requires companies to
perform ongoing reassessments of whether it is the primary beneficiary of a VIE. This assessment no longer includes the quantitative-based assessment, and instead requires a qualitative assessment of
whether a company has
the power to direct the VIE's activities that most significantly impact the company's economic performance and whether the entity has the obligation to absorb losses or the right to receive benefits
that could be significant to the VIE. The Company adopted this guidance on February 1, 2010. Its adoption did not have a material effect on the Company's consolidated financial statements.

In
April 2009, the FASB issued authoritative guidance on the accounting and disclosure of assets acquired and liabilities assumed in a business combination that arise from contingencies,
and subsequent accounting for these contingencies. This guidance was codified in ASC 805,Business Combinations. The Company adopted this
guidance on February 1, 2010. Its adoption did not have a material effect on its consolidated financial statements based on the nature of the assets acquired and liabilities assumed in the
Company's business combinations.

NOTE 2RECEIVABLES

January 31, 2011

January 31, 2010(in thousands)Trade accounts receivableDue from customers

$
13,295

$
8,488Due from finance companies


16,963


7,941Due from manufacturers


14,422


5,847Total trade accounts receivable


44,680


22,276Other receivables


694


311$
45,374

$
22,587Less allowance for doubtful accounts


(429
)

(333
)$
44,945

$
22,254


NOTE 3INVENTORIES

January 31,
2011

January 31,
2010(in thousands)New equipment

$
209,871

$
174,193Used equipment


162,254


127,884Parts and attachments


52,694


42,611Work in process


5,025


2,892$
429,844

$
347,580


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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3INVENTORIES (Continued)

In
addition to the above amounts, the Company has estimated that a portion of its parts inventory will not be sold in the next year. Accordingly, these balances have been classified as
noncurrent assets.

NOTE 4PROPERTY AND EQUIPMENT

January 31,
2011

January 31,
2010(in thousands)Rental fleet equipment

$
21,887

$
15,231Machinery and equipment


14,047


11,703Vehicles


20,003


15,544Furniture and fixtures


13,756


10,401Land, buildings, and leasehold improvements


20,904


12,248$
90,597

$
65,127Less accumulated depreciation


(25,225
)

(18,523
)$
65,372

$
46,604


Depreciation
expense amounted to $8.9 million, $7.9 million and $4.4 million, respectively, for the years ended January 31, 2011, 2010 and 2009.

NOTE 5INTANGIBLE ASSETS AND GOODWILL

The Company acquired intangible assets with finite lives, consisting of covenants not to compete totaling $0.5 million with a weighted-average amortization period of
6.5 years and customer relationships totaling $0.5 million with a weighted-average amortization period of three years, as part of the business combinations and an asset purchase
completed during the year ended January 31, 2011. The Company also acquired intangible assets with indefinite lives, consisting of distribution rights totaling $3.6 million, as part of
the business combinations completed during the year ended January 31, 2011. No intangible assets were acquired during the year ended January 31, 2010.

Indefinite
lived intangible assets consisted of distribution rights totaling $3.6 million as of January 31, 2011. The following is a summary of intangible assets with
finite lives as of January 31, 2011 and 2010:

Cost

Accumulated
Amortization

Net(in thousands)Balance, January 31, 2011Covenants not to compete

$
1,075

$
(366
)
$
709Customer relationships


451


(12
)

439$
1,526

$
(378
)
$
1,148Balance, January 31, 2010Covenants not to compete

$
575

$
(280
)
$
295


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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5INTANGIBLE ASSETS AND GOODWILL (Continued)

Amortization
expense was $0.1 million, $0.1 million, and $0.2 million for the years ended January 31, 2011, 2010 and 2009, respectively. Future amortization
expense, as of January 31, 2011, is expected to be as follows:

Years ending January 31,

Amount(in thousands)2012

$
3032013


3002014


2592015


1212016


101Thereafter


64$
1,148


Changes
in the carrying amount of goodwill during the years ended January 31, 2011 and 2010 are summarized as follows:

Agriculture

Construction

Total(in thousands)Balance, January 31, 2009

$
10,124

$
2,340

$
12,464Arising in completed business combinations


1,464





1,464Adjustments to business combinations completed in prior year


1,113


(279
)

834Impairment losses








Balance, January 31, 2010


12,701


2,061


14,762Arising in completed business combinations


2,245





2,245Adjustments to business combinations completed in prior year


1,384





1,384Impairment losses








Balance, January 31, 2011

$
16,330

$
2,061

$
18,391


NOTE 6LINES OF CREDIT/FLOORPLAN NOTES PAYABLE

Senior Secured Credit FacilityOperating and Floorplan Lines of Credit

On October 31, 2010, the Company entered into a Senior Secured Credit Facility (the "Credit Agreement") with a group of banks
led by Wells Fargo Bank, National Association (the "Wells Fargo Bank Syndicate"). The Credit Agreement provides for a $175.0 million wholesale floorplan line of credit (the "Floorplan Line")
and a $50.0 million working capital line of credit (the "Working Capital Line"), both of which expire October 31, 2014. The Credit Agreement has a variable interest rate on outstanding
balances of LIBOR plus an applicable margin of 1.5% to 2.0% per annum, depending upon the Company's consolidated leverage ratio, has a 0.2% to 0.4% non-usage fee on the average monthly
unused amount and requires monthly payments of accrued interest. The Credit Agreement is secured by all assets of the Company and contains certain financial covenants that impose a minimum level of
fixed charge coverage ratio and a maximum level of debt to tangible net worth ratio and

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6LINES OF CREDIT/FLOORPLAN NOTES PAYABLE (Continued)

include
annual thresholds for acquisitions and capital expenditures. The Credit Agreement also restricts our ability to pay cash dividends to an amount not to exceed 50% of consolidated net income for
the then trailing four quarters, so long as no default of event of default exists prior to or immediately following such action or otherwise results from such action. As of January 31, 2011,
the Company was in compliance with all financial covenants. The Credit Agreement became effective on November 2, 2010.

The
Floorplan Line is used to finance equipment inventory purchases. Amounts outstanding are recorded as floorplan notes payable, within current liabilities on the consolidated balance
sheets as the Company intends to repay amounts borrowed within one year.

The
Working Capital Line is used to finance working capital requirements of the Company and replaced the Company's previous $25.0 million operating line and Term Loan (as defined
below) with Bremer Bank National Association ("Bremer Bank") and certain notes payable to CNH Capital America LLC ("CNH Capital") for rental fleet equipment. Amounts outstanding are recorded as
long-term debt, within long-term liabilities on the consolidated balance sheets, as the Company does not have the intention or obligation to repay amounts borrowed within one
year.

Operating Line of Credit

Prior to November 2010, the Company was party to a Loan Agreement (the "Loan Agreement") with Bremer Bank dated July 15, 2009,
as amended on July 13, 2010, which provided for a $25.0 million revolving operating line of credit (the "Revolving Loan") and a $12.9 million term loan (the "Term Loan"). The Loan
Agreement was terminated in November 2010 and replaced with the aforementioned Working Capital Line. The Revolving Loan was used to fund short term working capital requirements of the Company. The
Revolving Loan had a variable interest rate of 0.25% per annum below a Bremer Bank reference rate (subject to a minimum interest rate floor of 4.5%) on outstanding balances, had a 0.5%
non-usage fee on the average monthly unused amount, required monthly payments of accrued interest, and had a maturity date of July 12, 2011. The Term Loan had an interest rate of
5.9%, required monthly payments of principal and interest, and had a maturity date of July 2014. Advances under the Loan Agreement were secured by substantially all of the Company's assets.

Floorplan Lines of Credit

As of January 31, 2011, the Company had discretionary floorplan lines of credit for equipment purchases totaling approximately
$550.0 million with various lending institutions, including the aforementioned $175.0 million Floorplan Line, a $300.0 million Wholesale Floorplan Credit Facility with CNH Capital
and $75.0 million Wholesale Financing Plan with Rental Agreement with Agricredit Acceptance LLC ("Agricredit"). Floorplan notes payable relating to these credit facilities totaled approximately
$300.6 million of the total floorplan notes payable balance of $320.8 million outstanding as of January 31, 2011 and $245.3 million of the total floorplan notes payable
balance of $249.9 million outstanding as of January 31, 2010. As of January 31, 2011, the Company had approximately $242.4 million in available borrowings remaining under
these lines of credit. These floorplan notes carried various interest rates primarily ranging from 2.26 to 7.25% as of January 31, 2011, subject to interest-free periods offered by
CNH Capital. As of January 31, 2011, the Company was in compliance with all floorplan financial covenants.

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6LINES OF CREDIT/FLOORPLAN NOTES PAYABLE (Continued)

The
available borrowings under the CNH Capital credit facility are reduced by outstanding floorplan notes payable, rental fleet financing and other acquisition-related financing
arrangements with CNH Capital. During fiscal 2010, interest rates for new borrowings under the CNH Capital floorplan line of credit ranged from the prime rate plus 0.3% to the prime rate plus 6% per
annum, subject to any interest-free periods offered by CNH Capital. Since February 2010, interest rates have
been equal to the prime rate plus 4% on new borrowings, subject to any interest-free periods offered by CNH Capital. The CNH Capital credit facility automatically renews on
August 31 of each year through August 31, 2012, unless earlier terminated by either party. Under covenants of the CNH Capital credit facility, the Company has agreed, among other things,
to maintain various financial ratio levels and to submit certain financial information. It also contains various restrictive covenants that require prior consent of CNH Capital if the Company desires
to engage in any acquisition of, consolidation or merger with any other business entity in which the Company is not the surviving company; create subsidiaries; move any collateral outside of the U.S.;
or sell, rent, lease or otherwise dispose or transfer any of the collateral, other than in the ordinary course of business. CNH Capital's consent is also required for the acquisition of any CNH
dealership. In addition, the CNH Capital credit facility restricts the Company's ability to incur any liens upon any substantial part of its assets. The balances outstanding with CNH Capital are
secured by the related inventory. Repayment terms vary by individual notes, but generally payments are made from sales proceeds or rental revenue from the related inventories.

The
Company entered into the Wholesale Financing Plan with Rental Agreement with Agricredit on July 10, 2010, which was amended October 5, 2010 to increase the maximum
credit facility from $25.0 million to $75.0 million and require additional covenants. The Agricredit credit facility may be used to purchase or refinance new and used equipment
inventory. The interest rate on borrowings under the Agricredit credit facility is equal to the three-month LIBOR rate plus 5.25%. The Agricredit credit facility allows for increase, decrease or
termination of the credit facility by Agricredit on 90 days notice. Under covenants of the Agricredit credit facility, the Company had agreed, among other things, to maintain various financial
ratio levels, to submit certain financial information, and to obtain prior consent from Agricredit if the Company desired to engage in any acquisition meeting certain financial thresholds. The
balances outstanding with Agricredit are secured by the related inventory. Repayment terms vary by individual notes, but generally payments are made from sales proceeds or rental revenue from the
related inventories.

The
Company had a $75.0 million credit facility with GE Commercial Distribution Finance Corporation ("GE"). The GE credit facility was terminated in November 2010 and was replaced
with the aforementioned Floorplan Line. The GE credit facility had been used to purchase new and used inventory from vendors approved by GE, or to finance or refinance new or used inventory. The
interest rate on borrowings under the GE floorplan line of credit was equal to the three-month LIBOR rate plus 4.95%. The GE credit facility allowed for termination by either party on 60 days
notice. Under covenants of the GE credit facility, the Company had agreed, among other things, to maintain various financial ratio levels and to submit certain financial information. It also contained
various restrictive covenants regarding related party transactions outside of the ordinary course of business and required GE's prior consent if the Company desired to engage in any acquisition
meeting certain financial thresholds; made any investments outside of the ordinary course of business; or had a change in control, as defined by the GE credit facility.

74

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7LONG-TERM DEBT

The following is a summary of long-term debt as of January 31, 2011 and 2010:

January 31,
2011

January 31,
2010(in thousands)Working Capital Line payable to the Wells Fargo Bank Syndicate (see details in Note 6)

$
26,407

$
Variable rate notes payable to CNH Capital and other finance companies, variable rates primarily at prime plus 4%, varying monthly installment payments
maturing April 2015, secured by rental fleet equipment


1,122


9,591Fixed rate notes payable to finance companies, interest rates primarily ranging from 3.49% to 10.20%, due in monthly installments including interest and
various maturity dates through May 2016, secured by vehicles


3,714


2,870Fixed rate notes to various finance companies and other parties, interest rates ranging from 3.65% to 7.09%, due in monthly installments including
interest and various maturity dates through January 2018, secured by fixed assets


5,628


1,374Note payable to AgCountry, due February 2011, variable interest at the LIBOR rate plus 4.0%, unsecured


388


780Other, variable interest rates at 6.5% to 7.25%, various maturity dates through January 2015


357


792Note payable to Bremer Bank, 5.9%, due in monthly installments of $289,300, original maturity July 2014, secured by all assets of the Company





13,66337,616


29,070Less current maturities


(4,207
)

(7,218
)$
33,409

$
21,852


75

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7LONG-TERM DEBT (Continued)

Long-term
debt maturities are as follows:

12 Months Ending January 31,

Amount(in thousands)2012

$
4,2072013


2,3412014


2,3592015


27,1872016


1,155Thereafter


367$
37,616


NOTE 8ACCRUED EXPENSES

January 31,
2011

January 31,
2010(in thousands)Interest

$
143

$
661Compensation


10,167


6,983Sales and payroll taxes


1,958


938Health insurance claims liability


653


527Deferred revenue


2,785


Other


1,110


761$
16,816

$
9,870


NOTE 9OPERATING LEASES AND RELATED PARTY TRANSACTIONS

As of January 31, 2011 the Company leases buildings pursuant to 41 different operating lease agreements with monthly minimum lease payments of $0.5 million at
January 31, 2011 from Dealer Sites, LLC ("Dealer Sites"), an entity in which a minority position is owned by David Meyer, the Company's Chairman and Chief Executive Officer, Tony Christianson,
one of the Company's directors, Peter Christianson, the Company's President and Chief Operating Officer, and other Meyer and Christianson family members. Rent expense for leases with Dealer Sites
totaled $5.2 million, $3.9 million and $2.3 million for the years ended January 31, 2011, 2010 and 2009, respectively. The leases expire on various dates between May 2012
and April 2022 and provide that the lessee pay all property taxes, utilities, insurance and all expenses necessary for the general upkeep of the respective buildings.

76

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9OPERATING LEASES AND RELATED PARTY TRANSACTIONS (Continued)

Rent expense for building leases with related parties other than Dealer Sites totaled $0.2 million, $0.1 million, and $0.4 million for the years ended
January 31, 2011, 2010 and 2009, respectively. During fiscal year 2011, the Company leased two buildings pursuant to operating leases from C.I. Farm Power, Inc., a company affiliated
with Peter Christianson, and Arthur Mercantile Company, a company for which James L. Williams, one of the Company's directors, is the President and Treasurer. The lease with C.I. Farm
Power, Inc. expires in July 2013 and the lease with Arthur Mercantile Company will expire in May 2019. During fiscal year 2009 the Company leased various buildings on operating leases from Meyer
Family Limited Partnership, Padre Partnership, and Landco LLC, companies also affiliated with David Meyer and Peter Christianson.

The
Company also leases 47 additional buildings under operating lease agreements with unrelated parties and leases office equipment under various operating lease agreements. The leases
expire at various dates through July 2022. Rent and lease expense under all operating leases totaled $9.8 million, $7.8 million and $4.9 million during the years ended
January 31, 2011, 2010 and 2009, respectively. Certain leases have fluctuating minimum lease payments. The Company recognizes lease expense on a straight-line basis over the
expected term of the lease.

Approximate
minimum future lease payments are as follows:

Years ending January 31,

Amount(in thousands)2012

$
11,3052013


10,4552014


9,6772015


9,4692016


8,833Thereafter


30,429$
80,168


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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10INCOME TAXES

Net deferred tax assets and liabilities consist of the following components as of January 31, 2011 and 2010:

2011

2010(in thousands)Current deferred tax assets:Inventory allowances

$
1,811

$
1,140Stock-based compensation


380


357Receivables


172


133Other


884


636$
3,247

$
2,266Non-current deferred tax assets (liabilities):Property and equipment

$
(8,348
)
$
(6,156
)Intangibles


(641
)

(355
)Other, net


(23
)

155$
(9,012
)
$
(6,356
)


The
provision for income taxes charged to income for the years ended January 31, 2011, 2010 and 2009 consists of the following:

2011

2010

2009(in thousands)Currently payableFederal

$
10,676

$
7,652

$
9,202State


2,544


1,753


2,260Deferred


1,675


1,850


968$
14,895

$
11,255

$
12,430


The
reconciliation of the statutory federal income tax rate to the Company's effective rate is as follows:

2011

2010

2009U.S. Statutory Rate


35.0
%

35.0
%

35.0
%State taxes on income net of federal tax benefit


5.1
%

5.1
%

5.2
%All other, net


(0.1
)%

1.6
%

0.5
%40.0
%

41.7
%

40.7
%


Uncertain Tax Positions

The Company identified an uncertain tax position and recorded an unrecognized tax benefit during the year ending January 31,
2008. This unrecognized tax benefit was included in other long-term liabilities on the Company's consolidated balance sheet. In August 2009, the Internal Revenue Service ("IRS") completed
its audit of the Company, including the uncertain tax position taken during fiscal 2008. All amounts owed to state and federal taxing authorities were paid during the year ended January 31,
2010. There were not any additional unrecognized tax benefits identified during the year

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10INCOME TAXES (Continued)

ended
January 31, 2011. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended January 31, 2010 and 2009 is shown in the table below. There
was no activity related to unrecognized tax benefits for the year ended January 31, 2011.

January 31,
2010

January 31,
2009(in thousands)Balance, beginning of year

$
446

$
420Additions for tax positions related to current year





Additions/reductions for tax positions taken in prior yearsAccrued interest expense


9


26Reduction due to final IRS settlement


(14
)

Reductions for tax positions as a result of:Settlements


(441
)

Lapse of statute of limitations





Balance, end of year

$


$
446


The
Company files income tax returns in the U.S. federal jurisdiction and various states and is no longer subject to income tax examinations by U.S. federal tax authorities for fiscal
years ended on or prior to January 31, 2008 and state tax authorities for fiscal years ended on or prior to January 31, 2006.

NOTE 11CAPITAL STRUCTURE

The Company's certificate of incorporation provides the Company with the authority to issue 30,000,000 shares of $0.00001 par value stock, consisting of 25,000,000 shares
of common stock and 5,000,000 shares classified as undesignated.

NOTE 12STOCK-BASED COMPENSATION AND STOCK WARRANTS

Stock Warrants

The following table summarizes stock warrant activity for the year ended January 31, 2011:

Number of
Warrants

Weighted
Average
Exercise
Price

Aggregate
Intrinsic
Value

Weighted
Average
Remaining
Contractual
Life (Years)(in thousands)



(in thousands)Outstanding and exercisable at January 31, 2010


83

$
3.43

$
629


3.1Granted





Exercised


(43
)

3.36Forfeited





Outstanding and exercisable at January 31, 2011


40

$
3.50

$
832


2.4


The
aggregate intrinsic value of stock warrants exercised was $0.6 million, $0.3 million and $0.1 million for the years ended January 31, 2011, 2010 and 2009,
respectively.

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Table of Contents

TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12STOCK-BASED COMPENSATION AND STOCK WARRANTS (Continued)

Stock
warrants were valued using the Black-Scholes option pricing model. Assumptions used to value the warrants were similar to those used in valuing the stock options as described
below. Warrants issued in conjunction with a debt offering were valued and classified as Additional Paid-In Capital in accordance with applicable authoritative guidance in effect at the
time of the transaction.

Stock Award Plans

The Company implemented the 2005 Equity Incentive Plan, a stock-based compensation plan (the "Plan"), during the year ended
January 31, 2006. In August 2007, the Plan was amended to increase the number of shares available under the Plan from 500,000 to 1,000,000 shares. The purpose of the Plan is to provide
incentive compensation to participants for services that have been or will be performed for continuing as employees or members of the Board of Directors of the Company. Under the Plan, the Company may
grant incentive stock options, non-qualified stock options and restricted stock for up to 1,000,000 shares of common stock under all forms of awards. The Company accounts for stock
options and restricted stock using the fair value method under ASC 718,CompensationStock Compensation. Shares issued for
stock-based awards consist of authorized but unissued shares. The Company has approximately 92,000 shares authorized and available for future equity awards under the Plan as of
January 31, 2011.

Compensation
cost charged to operations under the Plan was $1.2 million, $1.0 million and $0.7 million for the years ended January 31, 2011, 2010 and 2009,
respectively. The related income tax benefit (net) was $0.3 million, $0.2 million, and $0.2 million for the years ended January 31, 2011, 2010 and 2009, respectively.

Stock Options

The Company grants stock options as part of its long-term incentive compensation to employees and members of the Board of
Directors of the Company. Stock options vest over a period of four to six years for employees and immediately for members of the Board of Directors, and have contractual terms of five to ten years.

The
following table summarizes stock option activity for the year ended January 31, 2011:

Number of
Options

Weighted
Average
Exercise
Price

Aggregate
Intrinsic
Value

Weighted
Average
Remaining
Contractual
Life (Years)(in thousands)



(in thousands)Outstanding at January 31, 2010


631

$
10.90Granted





Exercised


(27
)

6.49Forfeited


(2
)

22.21Outstanding at January 31, 2011


602

$
11.05

$
7,958


6.0Exercisable at January 31, 2011


334

$
9.63

$
4,878


5.6


The
aggregate intrinsic value of stock options exercised was $0.2 million, $0.1 million and $0.2 million for the years ended January 31, 2011, 2010 and 2009,
respectively. The weighted-average

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12STOCK-BASED COMPENSATION AND STOCK WARRANTS (Continued)

grant
date fair value of stock options granted was $11.16 and $8.41 for the years ended January 31, 2010, and 2009, respectively. There were no stock options granted for the year ended
January 31, 2011. The Company recognizes the fair value of stock options as compensation expense ratably over the vesting period of the award. The fair value of each stock option granted is
estimated using the Black-Scholes option pricing model. The following assumptions were made in estimating fair value for stock options granted during the following fiscal years:

Assumption

2010

2009Dividend yield


0%


0%Risk-free interest rate


3.1%


2.1  3.6%Expected life of options


6.75 years


6.75  8 yearsExpected volatility


39%


34  42%


The
following is a summary of information related to options outstanding and exercisable at January 31, 2011:

Options Outstanding

Options ExercisableRange of
Exercise
Prices

Number

Weighted
Average
Remaining
Contractual
Life (Years)

Weighted
Average
Exercise
Price

Number

Weighted
Average
Remaining
Contractual
Life (Years)

Weighted
Average
Exercise
Price(in thousands)





(in thousands)$  4.00    4.50


105


5.4

$
4.46


73


5.4

$
4.447.50  10.20


333


5.4


8.64


207


5.1


8.7011.15  14.69


33


7.8


11.85


10


7.8


11.8821.21  26.84


131


7.4


22.24


44


7.4


22.24602


6.0


11.05


334


5.6


9.63


As
of January 31, 2011 there was $1.2 million of unrecognized compensation cost on non-vested stock options that is expected to be recognized over a
weighted-average period of 2.6 years.

Restricted Stock

The Company grants restricted stock awards in addition to stock options as part of its long-term incentive compensation to
employees and members of the Board of Directors of the Company. The fair value of the restricted stock is determined based on the closing market price of the Company's stock on the date of grant. The
restricted stock primarily vests over a period of three to six years for employees and over one year for members of the Board of Directors. The Company recognizes compensation expense ratably over the
vesting period of the restricted stock.

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12STOCK-BASED COMPENSATION AND STOCK WARRANTS (Continued)

The
following table summarizes restricted stock activity for the year ended January 31, 2011:

Shares

Weighted
Average
Grant
Date
Fair Value

Weighted
Average
Remaining
Contractual
Term(number of shares
in thousands)Nonvested at January 31, 2010


163

$
11.45


2.5Granted


86


14.94Forfeited


(10
)

11.36Vested


(70
)

9.40Nonvested at January 31, 2011


169

$
14.06


2.8


The
weighted-average grant date fair value of restricted stock granted was $14.94, $12.89 and $17.45 during the years ended January 31, 2011, 2010 and 2009, respectively. The
total fair value of restricted stock vested was $1.2 million, $0.1 million, and $0.1 million during the years ended January 31, 2011, 2010
and 2009, respectively. As of January 31, 2011, there was $1.6 million of unrecognized compensation cost on non-vested restricted stock that is expected to be recognized over
a weighted-average period of 2.8 years.

NOTE 13EMPLOYEE BENEFIT PLANS

The Company has a 401(k) profit-sharing plan for full-time employees at least 19 years of age. The Company makes matching contributions of 50% of qualifying employee
elective contributions to the plan. The Company's matching contributions to the plan of $2.4 million, $1.5 million and $1.2 million were charged to expense for the years ended
January 31, 2011, 2010 and 2009, respectively. In addition, the Company may make a discretionary contribution to the plan as determined by the Board of Directors, with a maximum amount equal to
the amount allowed under the IRS regulations. The Company did not make any discretionary contributions to the plan for the years ended January 31, 2011, 2010 and 2009.

NOTE 14BUSINESS COMBINATIONS

The Company continued to implement its strategy of consolidating dealerships in desired market areas.
Below is a summary of the acquisitions completed for the years ended January 31, 2011, 2010 and 2009. In certain of the business combination transactions the Company recognized goodwill.
Factors contributing to the recognition of goodwill include an evaluation of enterprise value, historical financial performance, estimated industry potential within the market and the market territory
relationship to other existing and future planned Company locations. Pro forma results are not presented as the acquisitions are not considered material, individually or in aggregate, to the Company.
The results of operations have been included in the Company's consolidated results of operations since the date of each respective business combination.

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14BUSINESS COMBINATIONS (Continued)

Fiscal 2011

On June 1, 2010, the Company acquired certain assets of Hubbard Implement, Inc. The acquired entity consisted of one
agricultural equipment store located in Iowa Falls, Iowa which is contiguous to the Company's existing locations in Grundy Center and Waverly, Iowa. The acquisition-date fair value of the
total consideration transferred for the dealership was $1.5 million.

On
December 31, 2010, the Company acquired certain assets of Fairbanks International, Inc. ("Fairbanks"), Fairbanks's wholly-owned subsidiary, Fairbanks Leasing, Inc., and an
affiliated entity of Fairbanks, GuideNet Systems, LLC. The acquisition consists of six agricultural equipment stores in Grand Island, Kearney, Lexington, Holdrege, Hastings, and North Platte, Nebraska
and expands the Company's agricultural presence in the Midwest. The acquisition-date fair value of the total consideration transferred for the dealerships was $29.7 million.

During
the year ended January 31, 2011, adjustments were recorded for additional consideration of $1.4 million earned and paid under agreements disclosed in the Company's
Form 10-K for the fiscal year ended January 31, 2010 as filed with the SEC. This additional consideration resulted in a net increase in goodwill of $1.4 million.

Fiscal 2010

Winger Implement, Inc.

On May 1, 2009, the Company acquired 100% of the outstanding stock of Winger Implement, Inc. and subsequently merged the
acquired entity into the Company. The acquired entity consisted of one agricultural equipment store located in Winger, Minnesota and expands the Company's presence in the Red River Valley. The
acquisition-date fair value of the total consideration transferred for the dealership was $1.5 million.

Arthur Mercantile Company

On May 28, 2009, the Company acquired certain assets of Arthur Mercantile Company. The acquired entity consisted of one
agricultural equipment store located in Arthur, North Dakota and expands the Company's presence in the Red River Valley. The acquisition-date fair value of the total consideration
transferred for the dealership was $0.8 million. James L. Williams, Arthur Mercantile Company's President and Treasurer, is a Titan Machinery director.

Valley Equipment, Inc.

On June 30, 2009, the Company acquired certain assets of Valley Equipment, Inc. in Mayville, North Dakota. The acquired entity
consisted of one agricultural equipment store and expands the Company's presence in the Red River Valley. The acquisition-date fair value of the total consideration transferred for the
dealership was $0.8 million. James L. Williams, Valley Equipment, Inc.'s President, is a Titan Machinery director.

Lickness Bros. Implement Co.

On August 14, 2009, the Company acquired certain assets of Lickness Bros. Implement Co. The acquired entity consisted of one
agricultural equipment store located in Britton, South Dakota and is

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14BUSINESS COMBINATIONS (Continued)

contiguous
to existing markets in Northeast South Dakota and Southeast North Dakota. The acquisition-date fair value of the total consideration transferred for the dealership was
$0.2 million.

Oskaloosa Implement Co.

On November 2, 2009, the Company acquired certain assets of Oskaloosa Implement Co. The acquired entity consisted of two
agricultural equipment stores located in Pella and Oskaloosa, Iowa and expands the Company's presence in Iowa. The acquisition-date fair value of the total consideration transferred for
the dealerships was $2.6 million.

Valley Farm Equipment, Inc.

On November 2, 2009, the Company acquired 100% of the outstanding stock of Valley Farm Equipment, Inc. and subsequently merged
the acquired entity into the Company. The acquired entity consisted of one agricultural equipment store located in Milbank, South Dakota and is strategically located in the Whetstone Valley in Eastern
South Dakota, between Titan Machinery's existing dealerships in Graceville, Minnesota, Watertown, South Dakota, and Aberdeen, South Dakota. The acquisition-date fair value of the total
consideration transferred for the dealership was $1.9 million.

During
the year ended January 31, 2010 adjustments were recorded to finalize the purchase price allocations of prior acquisitions and for additional consideration of
$1.1 million earned and paid under agreements disclosed below. These adjustments and additional consideration resulted in a net increase in goodwill of $0.8 million.

Fiscal 2009

Western Plains Machinery Co. and WP Rentals LLC

On December 31, 2008, the Company acquired certain assets of WP Rentals LLC and 100% of the outstanding stock of Western Plains
Machinery Co., and subsequently merged the acquired entity into the Company. WP Rentals LLC consisted of three construction equipment rental stores located in Billings and Belgrade, Montana and
Cheyenne, Wyoming. Western Plains Machinery Co. consisted of six construction equipment stores in Billings, Great Falls, Missoula, and Columbia Falls, Montana and Casper and Gillette, Wyoming. These
nine locations expand the number of Titan Machinery locations that offer construction equipment and are contiguous to existing markets in western South Dakota and North Dakota. The total consideration
for the dealerships included cash payments of $7.7 million.

Anderson Power and Equipment, Inc.

On December 22, 2008, the Company acquired 100% of the outstanding stock of Anderson Power and Equipment, Inc. and subsequently
merged the acquired entity into the Company. The acquired entity consisted of an agricultural equipment store located in Thief River Falls, Minnesota and is contiguous to existing markets in Western
Minnesota and Eastern North Dakota. The total cash purchase price for the dealership was $2.2 million.

Pioneer Garage, Inc.

On October 1, 2008, the Company acquired certain assets of Pioneer Garage, Inc. The acquired entity consisted of three
agricultural equipment stores located in Pierre, Highmore, and Miller,

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14BUSINESS COMBINATIONS (Continued)

South Dakota.
These stores are contiguous to existing markets in South Dakota. The total cash purchase price for the dealerships was $5.5 million.

Wolf's Farm Equipment, Inc.

On September 12, 2008, the Company acquired certain assets of Wolf's Farm Equipment, Inc. The dealership is located in Kintyre,
North Dakota and is contiguous to existing markets. The total cash purchase price for the dealership was $0.6 million.

Mid-Land Equipment Company, L.C.

On May 28, 2008, the Company acquired certain assets of Mid-Land Equipment Company, L.C. The acquired entity
consisted of six construction equipment stores located in Des Moines, Davenport, Clear Lake and Cedar Rapids, Iowa, and Omaha and Lincoln, Nebraska. These stores are contiguous to existing markets in
South Dakota and overlay the existing agricultural locations in Iowa. The total cash purchase price for the dealerships was $14.4 million.

Quad County Implement, Inc.

On May 1, 2008, the Company acquired 100% of the outstanding stock of Quad County Implement, Inc. and subsequently merged the
acquired entity into the Company. The
dealership is located in Blairstown, Iowa and is contiguous to existing markets. The acquisition increases the Company's market share in central Iowa. The total cash purchase price for the dealership
was $2.0 million.

Ceres Equipment, Inc.

On February 1, 2008, the Company acquired certain assets of Ceres Equipment, Inc. The dealership is located in Roseau, Minnesota
and is contiguous to existing markets. The acquisition increases the Company's market share in the northwest area of Minnesota. The total cash purchase price for the dealership was
$3.9 million.

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 14BUSINESS COMBINATIONS (Continued)

The
allocations of the purchase prices in the above business combinations are presented in the following table:

January 31,
2011

January 31,
2010

January 31,
2009(in thousands)Cash

$
4

$
315

$
54Receivables


2,812


558


4,905Inventories


21,241


15,189


42,594Deferred income taxes





93


63Property and equipment


5,512


1,462


22,255Intangible assets


4,387





250Other assets








89Goodwill


3,629


2,298


4,193$
37,585

$
19,915

$
74,403Accounts payable

$


$
(149
)
$
3,367Floorplan notes payable


2,737


8,765


24,608Customer deposits


1,868


286


392Accrued expenses


207


205


290Income taxes payable





(51
)

1,100Long-term debt





1,877


8,084Deferred income taxes





256


334$
4,812

$
11,189

$
38,175Cash consideration


32,316


7,581


35,575Non-cash consideration: other long-term liabilities


457


1,145


653Total consideration

$
32,773

$
8,726

$
36,228Goodwill related to the Agriculture operating segment

$
3,629

$
2,577

$
1,853Goodwill related to the Construction operating segment

$


$
(279
)
$
2,340Goodwill expected to be deductible for tax purposes

$
3,629

$
2,011

$
3,730


NOTE 15FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is generally defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a
forced liquidation sale. Quoted market prices are generally not available for the Company's financial instruments. Accordingly, fair values are based on judgments regarding anticipated cash flows,
future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates involve uncertainties and matters of judgment,
and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. As explained in Note 1, actual results could differ from the estimates.

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 15FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

The
carrying amount of cash, receivables, payables, short-term debt and other current liabilities approximates fair value because of the short maturity and/or frequent
repricing of those instruments. Based upon current borrowing rates with similar maturities, the carrying value of the long-term debt approximates the fair value as of January 31,
2011 and 2010.

NOTE 16SEGMENT INFORMATION AND OPERATING RESULTS

The Company owns and operates a network of full service agricultural and construction equipment stores in the United States. The Company's two reportable segments, Agriculture and
Construction, each offer different products and the operating results for each segment are reported separately to the Company's senior management to make decisions regarding the allocation of
resources, to assess the Company's operating performance and to make strategic decisions.

The
Company's Agriculture segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from large-scale farming to home and garden use. This segment
also includes ancillary sales and services related to agricultural activities and products such as equipment transportation, Global Positioning System ("GPS") signal subscriptions, hardware
merchandise and finance and insurance products.

The
Company's Construction segment sells, services, and rents machinery, and related parts and attachments, for uses ranging from heavy construction to light industrial machinery use.
This segment also includes ancillary sales and services related to construction activities such as equipment transportation, GPS signal subscriptions and finance and insurance products.

Revenues,
income before income tax and total assets at the segment level are reported before eliminations. The Company retains various unallocated income/(expense) items and assets at
the general corporate level, which the Company refers to as "Shared Resources" in the table below. Shared Resource assets primarily consist of cash and property and equipment. Intersegment revenues
are immaterial. For information regarding goodwill by segment, see Note 5.

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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 16SEGMENT INFORMATION AND OPERATING RESULTS (Continued)

Certain financial information for each of the Company's business segments is set forth below.

January 31, 2011

January 31, 2010

January 31, 2009(in thousands)RevenuesAgriculture

$
979,016

$
751,258

$
624,035Construction


152,646


116,361


88,032Segment revenues


1,131,662


867,619


712,067Eliminations


(37,173
)

(28,838
)

(21,630
)Total

$
1,094,489

$
838,781

$
690,437Income (Loss) Before Income TaxesAgriculture

$
44,083

$
36,133

$
32,023Construction


(3,451
)

(6,837
)

604Segment income (loss) before income taxes


40,632


29,296


32,627Shared Resources


(3,133
)

(2,120
)

(1,678
)Eliminations


(262
)

(184
)

(444
)Income before income taxes

$
37,237

$
26,992

$
30,505Interest IncomeAgriculture

$
111

$
94

$
49Construction


129


74


11Segment interest income


240


168


60Shared Resources


119


169


1,038Total

$
359

$
337

$
1,098Interest ExpenseAgriculture

$
8,140

$
4,471

$
5,018Construction


3,188


2,488


1,669Segment interest expense


11,328


6,959


6,687Shared Resources


(2,744
)

(11
)

(2,718
)Total

$
8,584

$
6,948

$
3,969Depreciation and AmortizationAgriculture

$
4,034

$
3,416

$
2,494Construction


3,855


3,793


1,510Segment depreciation and amortization


7,889


7,209


4,004Shared Resources


1,080


741


579Total

$
8,969

$
7,950

$
4,583Capital ExpendituresAgriculture

$
3,395

$
6,567

$
4,659Construction


4,221


2,917


770Segment capital expenditures


7,616


9,484


5,429Shared Resources


9,116


2,910


1,799Total

$
16,732

$
12,394

$
7,228Total AssetsAgriculture

$
514,049

$
350,086

$
252,599Construction


98,535


87,910


87,317Segment assets


612,584


437,996


339,916Shared Resources


37,340


77,631


70,963Eliminations


(1,078
)

(815
)

(631
)Total

$
648,846

$
514,812

$
410,248


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TITAN MACHINERY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

The following reflects selected quarterly financial information for fiscal years 2011 and 2010.

Revenue

Gross
Profit

Net
Income

Earnings per
Share-Basic

Earnings per
Share-Diluted(in thousands, except per share data)2011First quarter

$
205,457

$
34,443

$
1,559

$
0.09

$
0.09Second quarter


209,666


36,048


2,714


0.15


0.15Third quarter


311,307


47,978


7,706


0.44


0.42Fourth quarter


368,059


56,099


10,363


0.58


0.572010First quarter

$
166,301

$
28,516

$
1,790

$
0.10

$
0.10Second quarter


193,192


36,008


4,851


0.28


0.27Third quarter


227,018


39,583


5,733


0.33


0.32Fourth quarter


252,270


36,988


3,363


0.19


0.19


NOTE 18SUBSEQUENT EVENTS

On February 28, 2011, the Company acquired certain assets of Tri-State Implement, Inc. The acquired entity consisted of one agricultural equipment store located in
Sioux Falls, South Dakota which is contiguous to the Company's existing construction location in Sioux Falls. The acquisition-date fair value of the total consideration transferred for the
dealership was $1.0 million.

On
March 31, 2011, the Company acquired 100% of the outstanding stock of Schoffman's Inc. The acquisition consisted of one agricultural equipment store in Redwood Falls, Minnesota
and is contiguous to the Company's existing location in Marshall, Minnesota. The acquisition-date fair value of the total consideration transferred for the dealership was
$5.8 million.

On
April 1, 2011, the Company acquired certain assets of ABC Rental & Equipment Sales. The acquired entity consisted of four construction equipment rental stores located in
Williston, North Dakota, and Bozeman, Missoula, and Big Sky, Montana. This acquisition expands the Company's opportunity to capitalize on increased activity of the surrounding oil, coal and natural
gas exploration and extraction in Montana, North and South Dakota, as well as Wyoming. The acquisition-date fair value of the total consideration transferred for the dealership was
$5.4 million.

On
April 15, 2011, the Company entered into a Purchase Agreement to acquire certain assets of Carlson Tractor & Equipment, Inc. The acquisition consists of two construction
equipment stores in Rogers and Rosemount, Minnesota and expands the Company's Construction presence in Minnesota. The Company expects the closing date to be on or around May 15, 2011.

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Schedule IIValuation and Qualifying Accounts and Reserves    Titan Machinery Inc.

Classification

Beginning
Balance

Additions
Charged to
Expenses

Deductions
for
Write-offs

Ending
Balance(in thousands)Valuation reserve deduction from receivables:Year ended January 31, 2011

$
333

$
805

$
(709
)
$
429Year ended January 31, 2010


214


458


(339
)

333Year ended January 31, 2009


189


273


(248
)

214


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.After evaluating the effectiveness of the Company's disclosure controls and
procedures pursuant to
Rule 13a-15(b) of the Securities Exchange Act of 1934 (the "Exchange Act") as of the end of the period covered by this annual report, our Chief Executive Officer and Chief Financial
Officer, with the participation of the Company's management, have concluded that the Company's disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) are
effective.

Management's Report on Internal Control Over Financial ReportingOur management is responsible for establishing and maintaining
adequate internal
control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this evaluation, management has concluded that our internal
control over financial reporting was effective as of January 31, 2011.

Eide
Bailly LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has
also audited our internal control over financial reporting as of January 31, 2011, as stated in their attestation report included in Part II, Item 8 of this Annual Report on
Form 10-K.

Changes in Internal Control over Financial Reporting.There has not been any change in the Company's internal control over financial
reporting (as
defined in Exchange Act Rule 13a-15(f)) during its most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

Effective February 1, 2011, the base salary for the Company's Chief Executive Officer, David J. Meyer, and President and
Chief Operating Officer, Peter J. Christianson, was increased to $330,000 under the amended and restated employment agreements dated October 1, 2010 with Messrs. Meyer and
Christianson.

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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Other than the information included in Part I of this Form 10-K under the heading "Executive Officers of the
Registrant," the information required by Item 10 is incorporated by reference to the sections labeled "Election of Directors," "Corporate Governance" and "Section 16(a) Beneficial
Ownership Reporting Compliance," all of which appear in our definitive proxy statement for our 2011 Annual Meeting.

ITEM 11.    EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated herein by reference to the sections entitled "Executive Compensation,"
"Non-Employee Director Compensation," "Compensation Committee," "Compensation Committee Interlocks and Insider Participation" and "Compensation Committee Report," all of which appear in
our definitive proxy statement for our 2011 Annual Meeting.

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

The information required by Item 12 is incorporated herein by reference to the sections entitled "Principal Stockholders and
Management Stockholdings" and "Equity Compensation Plan Information," both of which appear in our definitive proxy statement for our 2011 Annual Meeting.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 is incorporated herein by reference to the sections entitled "Corporate
GovernanceIndependence" and "Certain Relationships and Related Party Transactions," both of which appear in our definitive proxy statement for our 2011 Annual Meeting.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 14 is incorporated herein by reference to the section entitled "Fees of the Independent
Registered Public Accounting Firm," which appears in our definitive proxy statement for our 2011 Annual Meeting.

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES





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SIGNATURES

Pursuant to the requirements of Section 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.

Dated: April 18, 2011TITAN MACHINERY INC.By

/s/ DAVID J. MEYER David J. Meyer, Chairman and Chief Executive Officer

By

/s/ MARK P. KALVODA Mark P. Kalvoda Chief Financial Officer


POWER OF ATTORNEY

Each person whose signature appears below constitutes DAVID J. MEYER and MARK P. KALVODA his true and lawful
attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to
sign any or all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said
attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof. 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 and on the dates indicated.

Signatures

Title

Date/s/ DAVID J. MEYER David J. Meyer

Chairman and Chief Executive Officer (principal executive officer)

April 18, 2011/s/ PETER J. CHRISTIANSON Peter J. Christianson

President and Chief Operating Officer, Director

April 18, 2011/s/ MARK P. KALVODA Mark P. Kalvoda

Chief Financial Officer, (principal financial officer and principal accounting officer)

April 18, 2011/s/ GORDON PAUL ANDERSON Gordon Paul Anderson

Director

April 18, 2011


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Signatures

Title

Date/s/ TONY CHRISTIANSON Tony Christianson

Director

April 18, 2011/s/ JAMES WILLIAMS James Williams

Director

April 18, 2011/s/ JAMES IRWIN James Irwin

Director

April 18, 2011/s/ JOHN BODE John Bode

Director

April 18, 2011/s/ THEODORE WRIGHT Theodore Wright

Director

April 18, 2011/s/ STANLEY DARDIS Stanley Dardis

Director

April 18, 2011


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EXHIBIT INDEX  TITAN MACHINERY INC.  FORM 10-K

Exhibit
No.

Description3.1

Certificate of Incorporation of the registrant(b)3.2

Bylaws of the registrant, as amended(e)4.1

Specimen Certificate representing shares of common stock of Titan Machinery Inc.(c)4.2

Common Stock Purchase Warrant, dated April 7, 2003, in favor of Cherry Tree Securities, LLC(b)4.3

Common Stock Purchase Warrant, dated August 1, 2004, in favor of Cherry Tree Securities, LLC(b)4.4

Form of Director Warrant.**(f)10.1

2005 Equity Incentive Plan**(a)10.2

Amended and Restated Employment Agreement, dated October 1, 2010, between David Meyer and the registrant**(j)10.3

Amended and Restated Employment Agreement, dated October 1, 2010, between Peter Christianson and the registrant**(k)10.4

Non-employee Director Compensation Policy**(c)10.5

Agricultural Equipment Sales & Service Agreement, dated December 31, 2002, between Case, LLC and the registrant(a)10.6

Construction Equipment Sales & Service Agreement, dated effective April 8, 2003, between Case, LLC and the registrant(a)10.7

Dealer Agreement, dated April 14, 2003, between New Holland North America, Inc. and the registrant, as amended December 27, 2005 and December 9, 2006(a)10.8

Construction Equipment Sales & Service Agreement, dated effective June 15, 2006, between CNH America, LLC and the registrant(a)10.9

Dealer Agreement, effective February 20, 2007, between CNH America LLC and the registrant(a)10.10

Dealer Agreement, dated effective June 22, 2006, between CNH America LLC and the registrant(a)10.11

Dealer Agreements, dated effective April 1, 2006, between CNH America and the registrant(a)10.12

Dealer Agreement, dated April 1, 2005, between CNH America LLC and the registrant(a)10.13

Dealer Agreement, dated effective January 1, 2000 between New Holland North America, Inc. and the registrant(a)10.14

Dealer Security Agreements between New Holland North America, Inc. and the registrant(a)10.15

Dealer Security Agreements between CNH America LLC and the registrant(a)10.16

Lease by and between Rocking Horse Farm, LLC and the registrant, dated August 2, 2004, and Addendum No. 1 thereto dated September 13, 2005(a)


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Exhibit
No.

Description10.17

Wholesale Floor Plan Credit Facility and Security Agreement, dated as of February 21, 2006, between CNH Capital America LLC and the registrant(a)10.18

Agreement for Wholesale Financing, dated June 29, 2004, between GE Commercial Distribution Finance Corporation and the registrant (and amendments dated January 24, 2007, November 7, 2005, June 29,
2004)(a)10.19

Loan Agreement, dated August 7, 2007, between Bremer Bank, N.A. and the registrant(a)10.20

Shareholder Rights Agreement, dated April 7, 2003, by and between the registrant and the individuals listed on Schedule A(a)10.21

Amendment No. 1 to Shareholder Rights Agreement, dated January 31, 2006, by and between the registrant and the individuals listed on Schedule A(a)10.22

Form of Incentive Stock Option Agreement under the 2005 Equity Incentive Plan**(a)10.23

Form of Non-Qualified Stock Option Agreement under the 2005 Equity Incentive Plan**(a)10.24

Form of Restricted Stock Agreement under the 2005 Equity Incentive Plan**(a)10.25

Amended and Restated Wholesale Floorplan Credit Facility and Security Agreement, dated November 13, 2007, between CNH Capital America LLC and the registrant(b)10.26

Consent and Agreement, dated November 13, 2007, between CNH Capital America LLC and the registrant(b)10.27

Amendment to Case IH Agricultural Equipment Sales and Service Agreement, dated November 14, 2007, between CNH America LLC and Red Power International, Inc.(b)10.28

Amendment to Case IH Agricultural Equipment Sales and Service Agreements, dated November 14, 2007, between CNH America LLC and the registrant(b)10.29

Amendment to Case Construction Equipment Sales and Service Agreements, dated November 14, 2007, between CNH America LLC and the registrant(b)10.30

Amendment to Kobelco Construction Machinery America LLC Dealer Agreement, dated November 14, 2007, between Kobelco Construction Machinery America LLC and the registrant(b)10.31

Amendment to CNH America LLC Dealer Agreement for New Holland Construction Products, dated November 14, 2007, between CNH America LLC and the registrant(b)10.32

Amendment to CNH America LLC Dealer Agreement for New Holland Agricultural Equipment, dated November 14, 2007, between CNH America LLC and the registrant(b)10.33

Recapitalization Agreement, dated effective August 16, 2007, among the registrant, David J. Meyer, C.I. Farm Power, Inc., Peter Christianson, Adam Smith Growth Partners, L.P., Adam Smith Companies, LLC,
 Tony J. Christianson, Adam Smith Activist Fund, LLC, David Christianson and Earl Christianson(b)10.34

Form of Director and Officer Indemnification Agreement(b)10.35

Agreement, dated July 17, 2007, between Cherry Tree Securities, LLC and the registrant(b)10.36

Amendment to Loan Documents dated December 4, 2007 between the registrant and Bremer Bank, N.A.(d)


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Exhibit
No.

Description10.37

Titan Machinery Inc. Fiscal 2009 Non-Employee Director Compensation Plan (incorporated by reference to Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended October 31,
 2007).**10.38

Titan Machinery Inc. Executive Bonus Plan (incorporated by reference to Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2007).**10.39*

Compensation Arrangements for Executive Officers**10.40

Loan Agreement, dated July 15, 2009, between Bremer Bank, N.A. and the registrant(g)10.41

Letter Agreement with CNH Capital America, LLC dated November 25, 2009(h)10.42

Second Amended and Restated Agreement for Wholesale Financing, dated March 12, 2010, between GE Commercial Distribution Finance Corporation and the registrant(i)10.43

Letter Agreement with CNH Capital America, LLC dated February 19, 2010(i)10.44

Credit Agreement dated as of October 31, 2010 by and among the registrant, Wells Fargo Bank, National Association, and the Financial Institutions Party Thereto(l)21

Subsidiaries of the Registrant: Transportation Solutions, LLC, a North Dakota limited liability company23.1*

Consent of Eide Bailly, LLP24.1*

Power of Attorney (Included on Signature Page)31.1*

Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2*

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1*

Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2*

Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


*Filed
herewith**Indicates
management contract or compensatory plan or arrangement.(a)Incorporated
herein by reference to the cited exhibit in Amendment No. 2 to Registration Statement on Form S-1, Reg.
No. 333-145526, filed with the Commission on October 10, 2007.(b)Incorporated
herein by reference to the cited exhibit in Amendment No. 5 to Registration Statement on Form S-1, Reg.
No. 333-145526, filed with the Commission on November 27, 2007.(c)Incorporated
herein by reference to the cited exhibit in Amendment No. 6 to Registration Statement Form S-1, Reg.
No. 333-145526, filed with the Commission on December 3, 2007.(d)Incorporated
herein by reference to the cited exhibit in Amendment No. 7 to Registration Statement on Form S-1, Reg.
No. 333-145526, filed with the Commission on December 5, 2007.(e)Incorporated
herein by reference to the cited exhibit in the registrant's Annual Report on Form 10-K filed with the Commission on
April 16, 2009.


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Table of Contents

(f)Incorporated
herein by reference to Exhibit 10.1 in the registrant's Quarterly Report on Form 10-Q filed with the Commission on
June 9, 2009.(g)Incorporated
herein by reference to Exhibit 10.1 in the registrant's Quarterly Report on Form 10-Q filed with the Commission on
September 9, 2009.(h)Incorporated
herein by reference to Exhibit 10.1 in the registrant's Quarterly Report on Form 10-Q filed with the Commission on
December 10, 2009.(i)Incorporated
herein by reference to the cited exhibit in the registrant's Annual Report on Form 10-K filed with the Commission on
April 15, 2010.(j)Incorporated
herein by reference to Exhibit 10.1 in the registrant's Quarterly Report on Form 10-Q filed with the Commission on
December 9, 2010.(k)Incorporated
herein by reference to Exhibit 10.2 in the registrant's Quarterly Report on Form 10-Q filed with the Commission on
December 9, 2010.(l)Incorporated
herein by reference to Exhibit 10.3 in the registrant's Quarterly Report on Form 10-Q filed with the Commission on
December 9, 2010.


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