##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
    WASHINGTON, D.C. 20549
  FORM 10-Q
    þ
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006
   o
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934  
  001-14437
  RTI INTERNATIONAL METALS,
    INC.
 (Exact name of registrant as
    specified in its charter)
   Ohio

52-2115953(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)1000 Warren Avenue, Niles,
    Ohio(Address of principal
    executive offices)

44446(Zip Code)   (330) 544-7700
 (Registrants telephone
    number, including area code)
   Yes þ     No o
  Rule 12b-2
 þ o o
  Rule 12b-2
 Yes o     No þ




---



##### 



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
      INDEX
  
  PagePART IFINANCIAL
    INFORMATIONItem 1.

Financial
    Statements


2Consolidated
    Statements of Operations (Unaudited) for the Three and Six
    Months Ended June 30, 2006 and 2005


2Consolidated
    Balance Sheets (Unaudited) as of June 30, 2006 and
    December 31, 2005


3Consolidated
    Statements of Cash Flows (Unaudited) for the Six Months Ended
    June 30, 2006 and 2005


4Consolidated
    Statement of Shareholders Equity (Unaudited) for the Six
    Months Ended June 30, 2006


5Condensed Notes to
    Consolidated Financial Statements


6Item 2.

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


20Item 3.

Quantitative and
    Qualitative Disclosures About Market Risk


29Item 4.

Controls and
    Procedures


29PART IIOTHER
    INFORMATIONItem 1A.

Risk
    Factors


29Item 2.

Unregistered Sales
    of Equity Securities and Use of Proceeds


30Item 4.

Submission of
    Matters to a Vote of Security Holders


30Item 6.

Exhibits


30Signatures


31EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART 1FINANCIAL
    STATEMENTS  Item 1.
    Financial
    Statements. RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Consolidated Statements of Operations
    (Unaudited)
    (In thousands, except share and per share amounts) Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Net sales

$
117,667


$
94,120


$
232,746


$
166,732Cost and expenses:Cost of sales


80,478



68,353



161,330



116,568Selling, general and
    administrative expenses


13,497



10,350



30,132



21,389Research, technical and product
    development expenses


387



417



845



783Operating income


23,305



15,000



40,439



27,992Other income


232



303



253



433Interest income, net


513



235



902



390Income from continuing operations
    before income taxes


24,050



15,538



41,594



28,815Provision for income taxes


8,923



4,993



15,725



9,887Income from continuing operations


15,127



10,545



25,869



18,928Income from discontinued
    operations, net of tax provision






35







51Net income

$
15,127


$
10,580


$
25,869


$
18,979Basic earnings per share:Continuing operations

$
0.67


$
0.48


$
1.14


$
0.86Discontinued operations














Net income

$
0.67


$
0.48


$
1.14


$
0.86Diluted earnings per share:Continuing operations

$
0.66


$
0.47


$
1.12


$
0.84Discontinued operations














Net income

$
0.66


$
0.47


$
1.12


$
0.84Weighted-average shares
    outstanding:Basic


22,649,637



22,233,556



22,602,552



22,109,449Diluted


23,030,340



22,657,458



23,015,942



22,558,186   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 2




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Consolidated Balance Sheets
    (Unaudited)
    (In thousands, except share and per share amounts) June 30,


December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
60,540


$
53,353Investments






2,410Receivables, less allowance for
    doubtful accounts of $1,992 and $1,604


64,745



54,212Inventories, net


236,613



223,394Deferred income taxes


3,796



3,778Other current assets


4,965



7,407Total current assets


370,659



344,554Property, plant and equipment, net


82,710



80,056Goodwill


49,146



48,646Other intangible assets, net


16,726



16,581Deferred income taxes


5,417



5,451Intangible pension asset


4,076



4,076Other noncurrent assets


1,962



2,387Total assets

$
530,696


$
501,751LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
27,254


$
25,620Accrued wages and other employee
    costs


10,636



10,953Billings in excess of costs and
    estimated earnings


9,992



13,352Income taxes payable


200



3,367Deferred income taxes


3



3Other accrued liabilities


9,490



8,589Total current liabilities


57,575



61,884Accrued postretirement benefit cost


21,271



21,070Accrued pension cost


24,524



25,595Deferred income taxes


6,498



6,516Other noncurrent liabilities


6,838



7,034Total liabilities


116,706



122,099Shareholders equity:Common stock, $0.01 par
    value; 50,000,000 shares authorized; 23,328,077 and
    23,131,128 shares issued; 22,850,134 and
    22,687,056 shares outstanding


233



231Additional paid-in capital


284,024



278,690Deferred compensation






(3,078
)Treasury stock, at cost; 477,943
    and 444,072 shares


(5,271
)


(4,389
)Accumulated other comprehensive
    loss


(24,175
)


(25,112
)Retained earnings


159,179



133,310Total shareholders equity


413,990



379,652Total liabilities and
    shareholders equity

$
530,696


$
501,751   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 3




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Consolidated Statements of Cash Flows
    (Unaudited)
    (In thousands) Six Months EndedJune 30,2006


2005OPERATING
    ACTIVITIES:Net income

$
25,869


$
18,979Net income from discontinued
    operations






(51
)Net income from continuing
    operations


25,869



18,928Adjustment for non-cash items
    included in net income:Depreciation and amortization


7,134



6,455Stock-based compensation and other


3,046



807Excess tax benefits from
    stock-based compensation activity


(2,918
)


2,367Gain on sale of property, plant
    and equipment


(4
)


(4
)Other


263



(371
)Changes in assets and liabilities:Receivables


(9,910
)


(14,828
)Inventories


(13,006
)


(44,462
)Accounts payable


966



12,955Deferred taxes and income taxes
    payable


(204
)


6,583Billings in excess of costs and
    estimated earnings


(3,331
)


8,862Other current liabilities


22



7,096Other assets and liabilities


1,943



700Cash provided by continuing
    operating activities


9,870



5,088Cash used by discontinued
    operating activities






(292
)Cash provided by operating
    activities


9,870



4,796INVESTING
    ACTIVITIES:Acquisitions, net of cash
    acquired, and other investing






(290
)Proceeds from disposal of
    property, plant and equipment


4



5Proceeds from sale of investments


2,410



Capital expenditures


(9,224
)


(4,553
)Cash used by investing activities


(6,810
)


(4,838
)FINANCING
    ACTIVITIES:Proceeds from exercise of employee
    stock options


2,097



8,808Excess tax benefits from
    stock-based compensation activity


2,918



Purchase of common stock held in
    treasury


(882
)


(483
)Cash provided by financing
    activities


4,133



8,325Effect of exchange rate changes on
    cash and cash equivalents


(6
)


211Increase in cash and cash
    equivalents


7,187



8,494Cash and cash equivalents at
    beginning of period


53,353



62,701Cash and cash equivalents at end
    of period

$
60,540


$
71,195   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 4




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Consolidated Statement of Shareholders Equity
    (Unaudited)
    (In thousands, except share amounts) Shares of

















OtherCommon





Additional











CompStock


Common


Paid-in


Deferred


Treasury


Retained


Income/





ComprehensiveOutstanding


Stock


Capital


Compensation


Stock


Earnings


(Loss)


Total


IncomeBalance at December 31, 2005


22,687,056


$
231


$
278,690


$
(3,078
)

$
(4,389
)

$
133,310


$
(25,112
)

$
379,652Shares issued for directors
    compensation


5,904



























Shares issued for restricted stock
    award plans


46,860



1























1Compensation expense recognized










3,045



















3,045Treasury Stock purchased at cost


(19,571
)














(882
)










(882
)Proceeds from exercise of employee
    options


144,185



1



2,096



















2,097Forfeiture of restricted stock
    awards


(14,300
)


























Tax benefits from stock-based
    compensation activity










3,271



















3,271SFAS 123R reclassification










(3,078
)


3,078















Net income






















25,869







25,869


$
25,869Adjustment to excess minimum
    pension liability(a)


























103



103



103Foreign currency translation


























834



834



834Comprehensive income

































$
26,806Balance at June 30, 2006


22,850,134


$
233


$
284,024


$



$
(5,271
)

$
159,179


$
(24,175
)

$
413,990     (a)
    
    Charge to minimum pension liability adjustment for the six
    months ended June, 30, 2006 is net of tax benefits of $64.  The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 5




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESCondensed Notes to Consolidated Financial
    Statements(Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
  Note 1BASIS
    OF PRESENTATION:
  Form 10-Q Regulation S-X.
  Form 10-K.
  Note 2ORGANIZATION:
    Note 3STOCK-BASED
    COMPENSATION:
  Accounting
    for Stock-Based Compensation
   6




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
            7




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
      Three Months Ended


Six Months EndedJune 30, 2005


June 30, 2005Net income, as reported

$
10,580


$
18,979Add: Stock-based compensation
    expense included in reported net income, net of related tax
    effects


187



351Deduct: Total stock-based
    compensation expense determined under the fair value method for
    all awards, net of related tax effects


(323
)


(613
)Pro forma net income

$
10,444


$
18,717Earnings per share:Basic - as reported

$
0.48


$
0.86Basic - pro forma

$
0.47


$
0.84Diluted - as reported

$
0.47


$
0.85Diluted - pro forma

$
0.46


$
0.83       Stock
    Options and Restricted Stock Award Plans
   8




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
         2006


2005Risk-free interest rate


4.37
%


4.00
%Expected dividend yield


0.00
%


0.00
%Expected lives (in years)


5.0



6.0Expected volatility


40.00
%


45.00
%     Weighted-Weighted-


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicStock Options

Shares


Price


Term (Years)


ValueOutstanding at December 31,
    2005


602,219


$
15.04Granted


71,300



45.09Forfeited


(9,887
)


22.99Expired


(2,232
)


12.22Exercised


(144,185
)


14.54Outstanding at June 30, 2006


517,215


$
19.22



6.76


$
18,942Exercisable at June 30, 2006


329,437


$
13.62



5.66


$
13,907  9




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
         Weighted-AverageGrant-DateNonvested Restricted Stock Awards

Shares


Fair ValueNonvested at December 31, 2005


199,636


$
16.49Granted


52,764



46.91Vested


(76,246
)


16.13Forfeited


(14,300
)


17.15Nonvested at June 30, 2006


161,854



26.51     SFAS 123R-3
  Note 4INCOME
    TAXES:
     10




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
     Note 5EARNINGS
    PER SHARE:
      Three Months Ended June 30,


Six Months Ended June 30,2006


2005


2006


2005Numerator:Income from continuing operations

$
15,127


$
10,545


$
25,869


$
18,928Income from discontinued
    operations, net of tax provision






35







51Net income

$
15,127


$
10,580


$
25,869


$
18,979Denominator:Basic weighted-average shares
    outstanding


22,649,637



22,233,556



22,602,552



22,109,449Effect of diluted securities


380,703



423,902



413,390



448,737Diluted weighted-average shares
    outstanding


23,030,340



22,657,458



23,015,942



22,558,186Basic earnings per share:Continuing operations

$
0.67


$
0.48


$
1.14


$
0.86Discontinued operations














Net income

$
0.67


$
0.48


$
1.14


$
0.86Diluted earnings per share:Continuing operations

$
0.66


$
0.47


$
1.12


$
0.84Discontinued operations














Net income

$
0.66


$
0.47


$
1.12


$
0.84  11




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
     Note 6INVENTORIES:
  last-in, first-in, lower-of-cost-or-market
  June 30,


December 31,2006


2005Raw materials and supplies

$
73,190


$
66,533Work-in-process
    and finished goods


209,403



195,870Less: LIFO reserve


(45,980
)


(39,009
)Inventories, net

$
236,613


$
223,394   Note 7GOODWILL
    AND OTHER INTANGIBLE ASSETS:
    Goodwill
    TranslationDecember 31, 2005


Adjustment


Adjustment


June 30, 2006Titanium Group

$
2,591


$



$



$
2,591Fabrication &
    Distribution Group


46,055







500



46,555Total goodwill

$
48,646


$



$
500


$
49,146   Intangibles
   12




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
     TranslationDecember 31, 2005


Amortization


Adjustment


June 30, 2006Titanium Group

$



$



$



$
Fabrication &
    Distribution Group


16,581



(402
)


547



16,726Total intangible assets

$
16,581


$
(402
)

$
547


$
16,726   Note 8BILLINGS
    IN EXCESS OF COSTS AND ESTIMATED EARNINGS:
    Note 9OTHER
    INCOME:
    Note 10EMPLOYEE
    BENEFIT PLANS:
      out-of-pocket
 13




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
     Pension Benefits


Other Postretirement BenefitsThree Months


Six Months


Three Months


Six MonthsEnded


Ended


Ended


EndedJune 30,


June 30,


June 30,


June 30,2006


2005


2006


2005


2006


2005


2006


2005Service cost

$
509


$
550


$
1,018


$
1,100


$
112


$
96


$
224


$
192Interest cost


1,619



1,592



3,238



3,184



397



410



795



820Expected return on plan assets


(2,014
)


(1,922
)


(4,029
)


(3,844
)














Amortization of prior service cost


208



160



416



320



44



44



88



88Amortization of unrealized gains
    and losses


621



510



1,242



1,020



96



93



193



186Net periodic benefit cost

$
943


$
890


$
1,885


$
1,780


$
649


$
643


$
1,300


$
1,286   Note 11COMMITMENTS
    AND CONTINGENCIES:
    Environmental
    Matters
       14




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
       Active Investigative or Cleanup Sites.
  Ashtabula River.
  Former Ashtabula Extrusion Plant.
  Reserve Environmental Services Landfill.
  Other
    Legal Matters
   15




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
   Note 12SEGMENT
    REPORTING:
      cut-to-size just-in-time
   16




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
     Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Net sales:Titanium Group

$
51,437


$
38,723


$
100,187


$
62,823Intersegment sales


33,717



22,159



64,858



43,050Total Titanium Group net sales


85,154



60,882



165,045



105,873Fabrication &
    Distribution Group


66,230



55,397



132,559



103,909Inter segment sales


1,524



1,075



3,310



2,040Total Fabrication &
    Distribution Group net sales


67,754



56,472



135,869



105,949Eliminations


35,241



23,234



68,168



45,090Total consolidated net sales

$
117,667


$
94,120


$
232,746


$
166,732Operating income:Titanium Group before corporate
    allocations

$
18,661


$
10,546


$
33,648


$
21,537Corporate allocations


(1,650
)


(1,322
)


(4,817
)


(2,781
)Total Titanium Group operating
    income


17,011



9,224



28,831



18,756Fabrication &
    Distribution Group before corporate allocations


9,880



8,707



20,376



15,366Corporate allocations


(3,586
)


(2,931
)


(8,768
)


(6,130
)Total Fabrication &
    Distribution Group operating income


6,294



5,776



11,608



9,236Total consolidated operating income

$
23,305


$
15,000


$
40,439


$
27,992Income from continuing
    operations before income taxes:Titanium Group

$
17,282


$
9,467


$
29,426


$
19,214Fabrication &
    Distribution Group


6,768



6,071



12,168



9,601Total consolidated income from
    continuing operations before income taxes

$
24,050


$
15,538


$
41,594


$
28,815   June 30,


December 31,2006


2005Assets:Titanium Group

$
232,637


$
230,477Fabrication &
    Distribution Group


248,375



231,658General corporate assets


49,684



39,616Total consolidated assets

$
530,696


$
501,751  17




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
   Note 13DISCONTINUED
    OPERATIONS:
      Three Months Ended


Six Months EndedJune 30, 2005


June 30, 2005Net sales

$
920


$
1,795Income before income taxes


55



82Provision for income taxes


(20
)


(31
)Net income from discontinued
    operations

$
35


$
51   Note 14NEW
    ACCOUNTING STANDARDS:
      Note 15TRANSACTIONS
    WITH RELATED PARTIES:
   18




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
    Condensed Notes to Consolidated Financial Statements
    (Unaudited)
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
   Note 16SUBSEQUENT
    EVENTS:
         19




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Forward-Looking
    Statements
    
    statements regarding the future availability and prices of raw
    materials,
    competition in the titanium industry,
    demand for the Companys products,
    the historic cyclicality of the titanium and aerospace
    industries,
    increased defense spending,
    the success of new market development,
    long-term supply agreements,
    legislative challenges to the Specialty Metals Clause of the
    Berry Amendment,
    global economic activities,
    the successful completion of our expansion projects,
    the Companys order backlog and the conversion of that
    backlog into revenue, and
    other statements contained herein that are not historical facts.    Overview
      Discontinued
    Operations
   20




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##### Table of Contents



Results
    of Operations
    Three
    Months Ended June 30, 2006 Compared To Three Months Ended
    June 30, 2005
  Net Sales.
  Three Months Ended June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
51.4


$
38.7


$
12.7



32.8
%Fabrication &
    Distribution Group


66.3



55.4



10.9



19.7
%Total consolidated net sales

$
117.7


$
94.1


$
23.6



25.1
%       Gross Profit.
  Three MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
20.5


$
12.0


$
8.5



70.8
%Fabrication &
    Distribution Group


16.7



13.8



2.9



21.0
%Total consolidated gross profit

$
37.2


$
25.8


$
11.4



44.2
%      21




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##### Table of Contents



Selling, General and Administrative
    Expenses.
  Three MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
3.1


$
2.3


$
0.8



34.8
%Fabrication &
    Distribution Group


10.4



8.0



2.4



30.0
%Total consolidated SG&A
    expenses

$
13.5


$
10.3


$
3.2



31.1
%     Research, Technical and Product Development
    Expenses.
  Operating Income.
  Three MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
17.0


$
9.2


$
7.8



84.4
%Fabrication &
    Distribution Group


6.3



5.8



0.5



9.0
%Total operating income

$
23.3


$
15.0


$
8.3



55.4
%       Other Income.
  Interest Income, net.
  Income Tax Expense.
 22




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##### Table of Contents



Income from Discontinued Operations.
  Six
    Months Ended June 30, 2006 Compared To Six Months Ended
    June 30, 2005
  Net Sales.
  Six MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
100.2


$
62.8


$
37.4



59.5
%Fabrication &
    Distribution Group


132.5



103.9



28.6



27.5
%Total consolidated net sales

$
232.7


$
166.7


$
66.0



39.6
%       Gross Profit.
  Six MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
37.6


$
24.5


$
13.1



53.5
%Fabrication &
    Distribution Group


33.8



25.7



8.1



31.7
%Total consolidated gross profit

$
71.4


$
50.2


$
21.2



42.3
%       Selling, General and Administrative
    Expenses.
  Six MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
8.0


$
4.9


$
3.1



63.3
%Fabrication &
    Distribution Group


22.1



16.5



5.6



33.9
%Total consolidated SG&A
    expenses

$
30.1


$
21.4


$
8.7



40.7
%  23




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##### Table of Contents



Research, Technical and Product Development
    Expenses.
  Operating Income.
  Six MonthsEnded June 30,


$ Increase/


% Increase/(In millions)

2006


2005


(Decrease)


(Decrease)Titanium Group

$
28.8


$
18.8


$
10.0



53.6
%Fabrication &
    Distribution Group


11.6



9.2



2.4



25.6
%Total operating income

$
40.4


$
28.0


$
12.4



44.3
%       Other Income.
  Interest Income, net.
  Income Tax Expense.
  Income from Discontinued Operations.
  Outlook
   24




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##### Table of Contents











10-year A-380 A-350
















Backlog. 2007-2010




Liquidity
    and Capital Resources










25



---



##### Table of Contents



Cash provided by operating activities.
  Cash used by investing activities.
  Cash provided by financing activities.
  Credit
    Agreement
        Environmental
    Matters
     26




---



##### Table of Contents



Active Investigative or Cleanup Sites.
  Ashtabula River.
  Former Ashtabula Extrusion Plant.
  Reserve Environmental Services Landfill.
 27




---



##### Table of Contents



New
    Accounting Standards


















28



---



##### Table of Contents



|        |                                                                
|------- | ---------------------------------------------------------------
|Item 3. | Quantitative
    and Qualitative Disclosures about Market Risk.



Form 10-K,
















|        |                             
|------- | ----------------------------
|Item 4. | Controls
    and Procedures.











PART II 
    OTHER INFORMATION




|         |                  
|-------- | -----------------
|Item 1A. | Risk
    Factors.



Form 10-K Form 10-K,




The
    ability to successfully expand our operations in a timely and
    cost effective manner






29



---



##### Table of Contents



|        |                                                                 
|------- | ----------------------------------------------------------------
|Item 2. | Unregistered
    Sales of Equity Securities and Use of Proceeds.







|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission
    of Matters to a Vote of Security Holders.







| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | All nominees for directors listed in the proxy statement were
    elected. Listed below are the names of each director elected,
    together with their individual vote totals.



|                    |  |     |            |  |          |  |           | 
|------------------- |  | --- | ---------- |  | -------- |  | --------- | 
|Nominee             |  | For |            |  | Withheld | 
|                   
|Craig R. Andersson  |  |     | 20,334,736 |  |          |  | 1,711,540 | 
|Daniel I. Booker    |  |     | 21,636,731 |  |          |  | 409,545   | 
|Donald P. Fusilli   |  |     | 20,462,057 |  |          |  | 1,584,219 | 
|Ronald L. Gallatin  |  |     | 20,638,525 |  |          |  | 1,407,751 | 
|Charles C. Gedeon   |  |     | 20,337,472 |  |          |  | 1,708,804 | 
|Robert M. Hernandez |  |     | 20,403,446 |  |          |  | 1,642,830 | 
|Edith E. Holiday    |  |     | 21,815,254 |  |          |  | 231,022   | 
|John H. Odle        |  |     | 21,622,160 |  |          |  | 424,116   | 
|Timothy G. Rupert   |  |     | 21,635,983 |  |          |  | 410,293   | 
|James A. Williams   |  |     | 21,938,118 |  |          |  | 108,158   | 





| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | The appointment of PricewaterhouseCoopers LLP as the
    Companys independent registered public accounting firm for
    2006 was ratified.



|                                                                  |  |     |            |  |         |  |           |         |  |  |       | 
|----------------------------------------------------------------- |  | --- | ---------- |  | ------- |  | --------- | ------- |  |  | ----- | 
|                                                                  |  | For |            |  | Against |  |           | Abstain | 
|                                                                 
|Ratification of independent
    registered public accounting firm |  |     | 20,818,723 |  |         |  | 1,222,710 |         |  |  | 4,843 | 





|        |          
|------- | ---------
|Item 6. | Exhibits.





30



---



##### Table of Contents

SIGNATURES















| |     |                         
| | --- | ------------------------
| | By: | /s/  William
    T. Hull







Vice President and Chief Accounting Officer


31



---



##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNo.

Description10
.1

Procurement Frame Contract between
    EADS Deutschland GmbH and RTI International Metals, Inc. dated
    April 26, 2006, filed herewith31
.1

Certification of Chief Executive
    Officer required by Item 307 of
    Regulation S-K
    as promulgated by the Securities and Exchange Commission and
    pursuant to Section 302 of Sarbanes-Oxley Act of 200231
.2

Certification of Principal
    Financial Officer required by Item 307 of
    Regulation S-K
    as promulgated by the Securities and Exchange Commission and
    pursuant to Section 302 of Sarbanes-Oxley Act of 200232
.1

Certification of Chief Executive
    Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Principal
    Financial Officer Pursuant to 18 U.S.C. Section 1350,
    as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002  32