##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 WASHINGTON, D.C.
    20549
   FORM 10-K
  (Mark One)
  þ
    ANNUAL REPORT PURSUANT TO SECTION
    13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE FISCAL YEAR ENDED
    DECEMBER 31, 2008
 OR
  o
    TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period
    from 
    to
  Commission file number
    001-14437
  RTI INTERNATIONAL METALS,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Ohio

52-2115953(State of Incorporation)

(I.R.S. Employer Identification No.)Westpointe Corporate Center One,
    5th Floor

    1550 Coraopolis Heights Road
    Pittsburgh, Pennsylvania

15108-2973(Zip code)(Address of principal executive offices)   Registrants telephone number,
    including area code:(412) 893-0026
  Securities registered pursuant
    to Section 12(b) of the Act:
  Title of each class

Name of each exchange on which registeredCommon Stock, par value $0.01 per share

New York Stock Exchange   Securities
    registered pursuant to Section 12(g) of the Act:
    None
   Yes þ     No o
   Yes o     No þ
   Yes þ     No o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated filer þ

Accelerated
    filer o

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

Smaller reporting company o   Rule 12b-2
 Yes o     No þ
      Documents
    Incorporated by Reference:




---



##### 





RTI
    INTERNATIONAL METALS, INC. AND CONSOLIDATED
    SUBSIDIARIES
       
 TABLE OF
    CONTENTS
  PagePART IItem 1.

Business


1Item 1A.

Risk Factors


9Item 1B.

Unresolved Staff Comments


13Item 2.

Properties


13Item 3.

Legal Proceedings


13Item 4.

Submission of Matters to a Vote of Security
    Holders


14PART IIItem 5.

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


15Item 6.

Selected Financial Data


16Item 7.

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


17Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


32Item 8.

Financial Statements and Supplementary Data


33Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


68Item 9A.

Controls and Procedures


68Item 9B.

Other Information


68PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


68Item 11.

Executive Compensation


69Item 12.

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


69Item 13.

Certain Relationships and Related Transactions
    and Director Independence


69Item 14.

Principal Accountant Fees and Services


70PART IVItem 15.

Exhibits and Financial Statement Schedules


70Signatures


73EX-21.1EX-23.1EX-24.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  Item 1.
    Business  The
    Company
          just-in-time
  Industry
    Overview
       1




---



##### Table of Contents



2008


2007


2006Commercial Aerospace


50
%


50
%


45
%Defense


34
%


33
%


32
%Industrial and Consumer


16
%


17
%


23
%   Commercial
    Aerospace
  Aerospace Market News, Aerospace
    Market News The Airline Monitor,
  ®
  Defense
  F/A-22, F/A-18,
      Industrial &
    Consumer
     2




---



##### Table of Contents



Products
    and Segments
    Titanium
    Group
        Fabrication
    Group
   3




---



##### Table of Contents



Distribution
    Group
  just-in-time
      2008


2007


2006(dollars in millions)

$


%


$


%


$


%Titanium Group

$
202.0



33.1
%

$
253.1



40.4
%

$
204.9



40.5
%Fabrication Group


146.8



24.1
%


132.0



21.1
%


83.1



16.4
%Distribution Group


261.1



42.8
%


241.7



38.5
%


217.4



43.1
%Total consolidated net sales

$
609.9



100.0
%

$
626.8



100.0
%

$
505.4



100.0
%     2008


2007


2006(dollars in millions)

$


%


$


%


$


%Titanium Group

$
61.8



70.7
%

$
102.6



72.7
%

$
78.5



68.1
%Fabrication Group


2.0



2.3
%


3.5



2.5
%


8.0



6.9
%Distribution Group


23.6



27.0
%


35.1



24.8
%


28.8



25.0
%Total consolidated operating income

$
87.4



100.0
%

$
141.2



100.00
%

$
115.3



100.00
%     (In millions)

2008


2007Titanium Group

$
375.0


$
281.2Fabrication Group


224.5



226.4Distribution Group


155.8



146.0General Corporate(1)


273.9



101.7Total consolidated assets

$
1,029.2


$
755.3     (1)
    
    Consists primarily of unallocated cash, short-term investments,
    and deferred tax assets.  Exports
   4




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##### Table of Contents



Form 10-K.
    Backlog
    Raw
    Materials
         5




---



##### Table of Contents



Competition
    and Other Market Factors
          Trade and
    Legislative Factors
      2007-2008
 6




---



##### Table of Contents



de minimis
    Environmental
    Liabilities
  96-1, Environmental Remediation Liabilities Accounting for Contingencies
        Marketing
    and Distribution
   7




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##### Table of Contents



Research,
    Technical, and Product Development
        Patents
    and Trademarks
    Employees
      Executive
    Officers of the Registrant
    Name

Age

TitleDawne S. Hickton


51


Vice Chairman and Chief Executive OfficerMichael C. Wellham


43


President and Chief Operating OfficerStephen R. Giangiordano


50


Executive Vice President of Technology and InnovationWilliam T. Hull


51


Senior Vice President and Chief Financial OfficerWilliam F. Strome


53


Senior Vice PresidentStrategic Planning and FinanceChad Whalen


34


Vice President, General Counsel and Secretary  8




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##### Table of Contents



Biographies
              Available
    Information
  Form 10-K, Form 10-Q, Form 8-K, 1-800-SEC-0330. www.sec.gov
 Item 1A.  Risk
    Factors.





In addition to the factors discussed elsewhere in this report
    and in Managements Discussion and Analysis, the following
    are some of the potential risk factors that could cause our
    actual results to differ materially from those projected in any
    forward-looking statements. Any of these individual risks, or
    any number of these risks occurring simultaneously, could have a
    material effect on our Consolidated Financial Statements. You
    should carefully consider these factors, as well as the other
    information contained in this document, when evaluating your
    investment in our securities. The below list of important
    factors is not all-inclusive or necessarily in order of
    importance.





We are
    subject to risks associated with global economic and political
    uncertainties





Like other companies, we are susceptible to macroeconomic
    downturns in the United States or abroad that may affect the
    general economic climate and our performance and the performance
    of our customers. The global

9




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##### Table of Contents



and/or
  A
    significant amount of our future revenue is based on long-term
    contracts for new aircraft programs
    The
    ability to successfully expand our operations in a timely and
    cost effective manner
    We may
    be affected by our ability or inability to obtain
    financing
    The
    demand for our products and services may be adversely affected
    by demand for our customers products and
    services
   10




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##### Table of Contents



A
    substantial amount of revenue is derived from the commercial
    aerospace and defense industries and a limited number of
    customers
    We may
    be subject to competitive disadvantages
    We may
    experience a lack of supply of raw materials at costs that
    provide us with acceptable margin levels
    We are
    subject to changes in product pricing
   11




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##### Table of Contents



We may
    experience a shortage in the supply of energy or an increase in
    energy costs to operate our plants
    Our
    business could be harmed by strikes or work
    stoppages
      Our
    business is subject to the risks of international
    operations
    We are
    dependent on services that are subject to price and availability
    fluctuations
    Our
    success depends largely on our ability to attract and retain key
    personnel
    The
    demand for our products and services may be affected by factors
    outside of our control
   12




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##### Table of Contents



The
    outcome of the U.S. Customs investigation of our previously
    filed duty drawback claims is uncertain
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.  Manufacturing
    Facilities
    Facilities
  Owned /




Annual RatedLocation

Leased


Products

CapacityTitanium GroupNiles, OH


Owned


Ingot (million pounds)


30.0Niles, OH


Owned


Mill products (million pounds)


22.0Canton, OH


Owned


Ferro titanium and specialty alloys (million pounds)


16.0Hermitage, PA


Owned


Metal processing (million pounds)


5.0Hamilton, MS


Owned


Titanium sponge production (facility under construction)


Martinsville, VA


Owned


Titanium forging and rolling (facility under construction)


Fabrication GroupWashington, MO


Owned


Hot and superplastically formed parts (thousand press hours)


50.0Montreal, Canada


Owned


Machining/assembly of aerospace parts (thousand man hours)


400Houston, TX


Leased


Extruded, Hot Stretch Formed products (million pounds)


4.2Houston, TX


Owned


Machining/fabricating oil/gas products (thousand man hours)


300Distribution GroupBirmingham, England


Leased


Cut parts and components (thousand man hours)


45.0Rosny-Sur-Siene, France


Leased


Cut parts and components (thousand man hours)


16.0Sullivan, MO


Leased


Cut parts (thousand man hours)


23.0Los Angeles, CA (2 locations)


Leased


Metal warehousing and distribution


N/AHartford, CT


Leased


Metal warehousing and distribution


N/AIndianapolis, IN


Leased


Metal warehousing and distribution


N/AHouston, TX


Leased


Metal warehousing and distribution


N/A     Item 3.
    Legal
    Proceedings.   13




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##### Table of Contents



Duty
    Drawback Investigation
        Accounting for
    Contingencies
  Other
    Matters
    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   14




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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.  Range of High and Low Stock Prices of Common Stock
  2008


2007Quarter

High


Low


High


LowFirst

$
70.33


$
43.40


$
94.30


$
67.82Second

$
51.84


$
35.25


$
101.49


$
73.04Third

$
36.12


$
17.15


$
88.32


$
58.42Fourth

$
19.45


$
7.91


$
85.20


$
64.59            15




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##### Table of Contents



Item 6.
    Selected
    Financial Data.      Years Ended December 31,2008


2007


2006


2005


2004Income Statement Data(1):Net sales

$
609,900


$
626,799


$
505,389


$
346,906


$
209,643Operating income (loss)


87,392



141,161



115,253
(2)


56,134



(14,566
)Income (loss) from continuing operations before income taxes


87,975



142,467



118,291



57,412



(4,996
)(3)Income (loss) from continuing operations


55,695



92,631



75,700



37,344



(2,319
)Income (loss) from discontinued operations, net of tax provision














1,591



(638
)Net income (loss)


55,695



92,631



75,700



38,935



(2,957
)Basic earnings (loss) per share:Continuing operations

$
2.44


$
4.04


$
3.34


$
1.68


$
(0.11
)Discontinued operations














0.07



(0.03
)Net income (loss)

$
2.44


$
4.04


$
3.34


$
1.75


$
(0.14
)Diluted earnings (loss) per share:Continuing operations

$
2.42


$
4.00


$
3.29


$
1.66


$
(0.11
)Discontinued operations














0.07



(0.03
)Net income (loss)

$
2.42


$
4.00


$
3.29


$
1.73


$
(0.14
)   December 31,2008


2007


2006


2005


2004Balance Sheet Data:Working capital

$
559,601


$
405,907


$
365,711


$
282,670


$
218,444Total assets


1,029,203



755,284



643,913



501,751



409,411Long-term debt


238,550



16,506



13,270







Total shareholders equity


601,934



575,784



462,181
(4)


379,652



323,958     (1)
    
    All years presented have been adjusted for the impacts of the
    discontinued operations which occurred in 2005 and 2004.(2)
    
    The adoption of SFAS 123(R) on January 1, 2006
    resulted in an additional $2.6 million of compensation
    expense in 2006.(3)
    
    Includes the effect of an approximately $9 million gain for
    settlement of a contractual claim.(4)
    
    The adoption of SFAS 158 as of December 31, 2006
    resulted in a decrease in equity of $10.8 million. 16




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Forward-Looking
    Statements
     
    the effect of the slowdown in U.S and global economic activity
    and policy changes following the U.S. Presidential election,
    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 commercial
    aerospace industries,
    changes in defense spending,
    the success of new market development,
    long-term supply agreements,
    the impact of Boeing 787 production delays,
    legislative challenges to the Specialty Metals Clause of the
    Berry Amendment,
    labor matters,
    outcome of the pending U.S. Customs investigation,
    the successful completion of our expansion projects,
    our ability to execute on new business awards,
    our order backlog and the conversion of that backlog into
    revenue, and
    other statements contained herein that are not historical facts.   Form 10-K,
  Overview
       17




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##### Table of Contents



just-in-time
        work-in-process,
  work-in-process
  Executive
    Summary
   18




---



##### Table of Contents



Results
    of Operations
  For
    the Year Ended December 31, 2008 Compared to the Year Ended
    December 31, 2007
  Net Sales.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2008


2007


(Decrease)


(Decrease)Titanium Group

$
202.0


$
253.1


$
(51.1
)


−20.2
%Fabrication Group


146.8



132.0



14.8



11.2
%Distribution Group


261.1



241.7



19.4



8.0
%Total consolidated net sales

$
609.9


$
626.8


$
(16.9
)


−2.7
%         Gross Profit.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2008


2007


(Decrease)


(Decrease)Titanium Group

$
86.6


$
121.4


$
(34.8
)


−28.7
%Fabrication Group


31.4



28.1



3.3



11.7
%Distribution Group


49.3



58.6



(9.3
)


−15.9
%Total consolidated gross profit

$
167.3


$
208.1


$
(40.8
)


−19.6
%      19




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##### Table of Contents



ramp-up
    Selling, General, and Administrative
    Expenses.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2008


2007


(Decrease)


(Decrease)Titanium Group

$
22.8


$
17.3


$
5.5



31.8
%Fabrication Group


29.3



24.1



5.2



21.6
%Distribution Group


25.7



23.9



1.8



7.5
%Total consolidated SG&A

$
77.8


$
65.3


$
12.5



19.1
%     Research, Technical, and Product Development
    Expenses.
  Operating Income.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2008


2007


(Decrease)


(Decrease)Titanium Group

$
61.8


$
102.6


$
(40.8
)


−39.8
%Fabrication Group


2.0



3.5



(1.5
)


−42.9
%Distribution Group


23.6



35.1



(11.5
)


−32.8
%Total consolidated operating income

$
87.4


$
141.2


$
(53.8
)


−38.1
%      20




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##### Table of Contents



Other Income (Expense).
  Interest Income and Interest Expense.
  Provision for Income Tax.
  For
    the Year Ended December 31, 2007 Compared to the Year Ended
    December 31, 2006
  Net Sales.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2007


2006


(Decrease)


(Decrease)Titanium Group

$
253.1


$
204.9


$
48.2



23.5
%Fabrication Group


132.0



83.1



48.9



58.8
%Distribution Group


241.7



217.4



24.3



11.2
%Total consolidated net sales

$
626.8


$
505.4


$
121.4



24.0
%        21




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##### Table of Contents



Gross Profit.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2007


2006


(Decrease)


(Decrease)Titanium Group

$
121.4


$
94.1


$
27.3



29.0
%Fabrication Group


28.1



28.0



0.1



0.4
%Distribution Group


58.6



50.8



7.8



15.4
%Total consolidated gross profit

$
208.1


$
172.9


$
35.2



20.4
%     ramped-up
    Selling, General, and Administrative
    Expenses.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2007


2006


(Decrease)


(Decrease)Titanium Group

$
17.3


$
14.1


$
3.2



22.7
%Fabrication Group


24.1



20.4



3.7



18.1
%Distribution Group


23.9



21.6



2.3



10.6
%Total consolidated SG&A

$
65.3


$
56.1


$
9.2



16.4
%     Research, Technical, and Product Development
    Expenses.
 22




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##### Table of Contents



Operating Income.
  Years EndedDecember 31,


$ Increase/


% Increase/(In millions)

2007


2006


(Decrease)


(Decrease)Titanium Group

$
102.6


$
78.5


$
24.1



30.7
%Fabrication Group


3.5



8.0



(4.5
)


56.3
%Distribution Group


35.1



28.8



6.3



21.9
%Total consolidated operating income

$
141.2


$
115.3


$
25.9



22.5
%         Other Income.
  Interest Income and Interest Expense.
  Provision for Income Taxes.
  Duty
    Drawback Investigation
     23




---



##### Table of Contents



Accounting for
    Contingencies
    Outlook
  ramp-up
  Backlog.
  Liquidity
    and Capital Resources
   24




---



##### Table of Contents



Cash provided by (used in) operating
    activities.
    Cash provided by (used in) investing
    activities.
    Cash provided by financing activities.
   25




---



##### Table of Contents



Contractual
    Obligations, Commitments and Other Post-Retirement
    Benefits
    Contractual Obligations2009


2010


2011


2012


2013


Thereafter


TotalLong-term debt(1)(7)

$
9.3


$
53.9


$
52.6


$
140.6


$
1.7


$
8.1


$
266.2Operating leases(2)


4.0



3.1



2.0



1.6



0.7







11.4Capital leases(2)


0.1























0.1Total contractual obligations

$
13.4


$
57.0


$
54.6


$
142.2


$
2.4


$
8.1


$
277.7   Commercial CommitmentsAmount of Commitment Expiration per Period2009


2010


2011


2012


2013


Thereafter


TotalLong-term supply agreements(3)(8)

$
64.0


$
83.4


$
88.1


$
90.7


$
92.1


$
138.6


$
556.9Purchase obligations(4)


95.9



64.8



8.5



9.1



9.1







187.4Standby letters of credit(5)


2.5























2.5Total commercial commitments

$
162.4


$
148.2


$
96.6


$
99.8


$
101.2


$
138.6


$
746.8   Other Post-Retirement Benefits2009

2010

2011

2012

2013

2014-2018

TotalOther post-retirement benefits(6)

$
2.6


$
2.6


$
2.6


$
2.6


$
2.5


$
12.1


$
25.0   Tax Obligations2009

2010

2011

2012

2013

Thereafter

TotalFIN 48 tax obligations(9)

$



$



$



$



$



$
3.3


$
3.3     (1)
    
    See Note 6 to the Companys Consolidated Financial
    Statements.(2)
    
    See Note 8 to the Companys Consolidated Financial
    Statements.(3)
    
    Amounts represent commitments for which contractual terms exceed
    twelve months.(4)
    
    Amounts primarily represent purchase commitments under purchase
    orders.(5)
    
    Amounts represent standby letters of credit primarily related to
    commercial performance and insurance guarantees.(6)
    
    The Company does not fund its other post-retirement employee
    benefits obligation but instead pays amounts when incurred.
    However, these estimates are based on current benefit plan
    coverage and are not contractual commitments in as much as the
    Company retains the right to modify, reduce, or terminate any
    such coverage in the future. Amounts shown in the years 2009
    through 2018 are based on actuarial estimates of expected future
    cash payments, and exclude the impacts of benefits associated
    with the Medicare Part D Act of 2003.(7)
    
    Amounts represent principal and interest on the Companys
    two long-term credit agreements and the Claro Interest-Free Loan
    Agreement.(8)
    
    In February 2007, the Company entered into a new contract for
    the long-term supply of titanium sponge, the primary raw
    material for our Titanium Group, with a Japanese supplier. This
    agreement runs through 2016 and will provide the Company with
    supply of up to 13 million pounds of titanium sponge
    annually, beginning in 2009. The Company has agreed to purchase
    a minimum of 10 million pounds annually for the five year
    period commencing in 2010. During the latter years of the
    contract, quantities can be reduced by the election of various
    options by both parties. Future obligations were determined
    based on current prices as prices are negotiated annually.
    Purchases under the contract are denominated in
    U.S. Dollars.

(9)
    
    These amounts are included in the Thereafter column
    as it cannot be reasonably estimated when these amounts may be
    settled. 26




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Off-Balance
    Sheet Arrangements
    Credit
    Agreements
      15-year
    New
    Accounting Standards
  Fair Value
    Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157 FAS 157-2). FAS 157-2
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 (
 27




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##### Table of Contents



instrument-by-instrument
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133
  The
    Hierarchy of Generally Accepted Accounting Principles
  Acquisitions
  and/or
  Critical
    Accounting Policies
     28




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##### Table of Contents



Inventories. last-in, first-in,
  Goodwill and Intangible Assets.
      Long-Lived Assets. Accounting for the Impairment or
    Disposal of Long-Lived Assets
  Income Taxes.
 29




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##### Table of Contents



Employee Benefit Plans.
  Dedicated
    Bond Portfolio
    −.25%

+.25%Effect on total projected benefit obligation (PBO) (in millions)

$
2.8


$
(2.8
)Effect on subsequent years periodic pension expense (in millions)

$
0.2


$
(0.2
)       2008


2007Asset category:Equity securities


50
%


56
%Debt securities and other short-term investments


49
%


42
%Cash


1
%


2
%Total


100
%


100
%     Asset category:Equity securities


56
%Debt securities and other short-term investments


42
%Cash


2
%Total


100
%    30




---



##### Table of Contents



Post-Retirement


Post-RetirementPension


Benefit Plan


Benefit Plan (notBenefit


(including Plan D


including Plan DPlans


subsidy)


subsidy)2009

$
8.2


$
2.6


$
3.02010


8.2



2.6



3.02011


8.3



2.6



3.02012


8.4



2.6



3.02013


8.5



2.5



3.02014 to 2018


44.0



12.1



14.3       Environmental Liabilities. 96-1, Environmental Remediation Liabilities Accounting for Contingencies
       31




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.  Commodity
    Price Risk
    Interest
    Rate Risk
      Foreign
    Currency Exchange Risk
  non-U.S. Dollar
  non-U.S. Dollar
 32




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data.  Index to
    Financial Statements
   
  PageReport of Independent Registered Public
    Accounting Firm


34Financial Statements:Consolidated Statements of Operations for the
    years ended December 31, 2008, 2007, and 2006


35Consolidated Balance Sheets at December 31,
    2008 and 2007


36Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007, and 2006


37Consolidated Statements of Comprehensive Income
    and Shareholders Equity for the years ended
    December 31, 2008, 2007, and 2006


38Notes to Consolidated Financial Statements


39Financial Statement Schedules:Schedule II  Valuation and
    Qualifying Accounts


S-1     33




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    Internal Control - Integrated Framework
        
    34




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Consolidated Statements of Operations
  (In thousands, except share and per share amounts)
  Years Ended December 31,2008


2007


2006Net sales

$
609,900


$
626,799


$
505,389Cost and expenses:Cost of sales


442,626



418,671



332,530Selling, general, and administrative expenses


77,762



65,317



56,110Research, technical, and product development expenses


2,120



1,650



1,496Operating income


87,392



141,161



115,253Other income (expense)


1,527



(2,134
)


540Interest income


3,262



4,764



3,172Interest expense


(4,206
)


(1,324
)


(674
)Income before income taxes


87,975



142,467



118,291Provision for income taxes


32,280



49,836



42,591Net income

$
55,695


$
92,631


$
75,700Earnings per share:Basic

$
2.44


$
4.04


$
3.34Diluted

$
2.42


$
4.00


$
3.29Weighted-average shares outstanding:Basic


22,872,075



22,930,768



22,657,225Diluted


22,987,503



23,154,194



23,037,096   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 35




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Consolidated Balance Sheets
  (In thousands, except share and per share amounts)
  December 31,2008


2007ASSETSCurrent assets:Cash and cash equivalents

$
284,449


$
107,505Receivables, less allowance for doubtful accounts of $2,260 and
    $613


79,778



102,073Inventories, net


274,330



296,559Deferred income taxes


29,456



12,969Other current assets


11,109



2,951Total current assets


679,122



522,057Property, plant, and equipment, net


271,062



157,355Goodwill


47,984



50,769Other intangible assets, net


13,196



17,476Deferred income taxes


15,740



6,059Other noncurrent assets


2,099



1,568Total assets

$
1,029,203


$
755,284LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
54,422


$
46,666Accrued wages and other employee costs


20,452



22,028Billings in excess of costs and estimated earnings


22,352



21,573Current portion of long-term debt


1,375



1,090Current liability for post-retirement benefits


2,632



2,660Current liability for pension benefits


121



5,962Other accrued liabilities


18,167



16,171Total current liabilities


119,521



116,150Long-term debt


238,550



16,506Noncurrent liability for post-retirement benefits


30,732



31,019Noncurrent liability for pension benefits


26,535



8,526Deferred income taxes


154



69Other noncurrent liabilities


11,777



7,230Total liabilities


427,269



179,500Commitments and ContingenciesShareholders equity:Common stock, $0.01 par value; 50,000,000 shares
    authorized; 23,688,010 and 23,610,746 shares issued;
    23,004,136 and 23,105,708 shares outstanding


237



236Additional paid-in capital


307,604



302,075Treasury stock, at cost; 683,874 and 505,038 shares


(16,891
)


(7,801
)Accumulated other comprehensive loss


(46,352
)


(20,367
)Retained earnings


357,336



301,641Total shareholders equity


601,934



575,784Total liabilities and shareholders equity

$
1,029,203


$
755,284   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 36




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Consolidated Statements of Cash Flows
  (In thousands)
  Years Ended December 31,2008


2007


2006OPERATING ACTIVITIES:Net income

$
55,695


$
92,631


$
75,700Adjustment for non-cash items included in net income:Depreciation and amortization


20,201



15,712



14,292Deferred income taxes


(18,186
)


(27,512
)


13,090Stock-based compensation


5,155



6,686



4,606Excess tax benefits from stock-based compensation activity


(215
)


(4,235
)


(5,102
)Loss (gain) on disposal of property, plant, and equipment


2



506



229Other


1,722



(893
)


(38
)Changes in assets and liabilities:Receivables


13,972



(6,843
)


(36,639
)Inventories


13,138



(50,985
)


(18,367
)Accounts payable


(6,352
)


10,659



6,356Income taxes payable


644



(242
)


7,300Billings in excess of costs and estimated earnings


4,690



561



7,805Other current assets and liabilities


(6,972
)


17,378



10,918Other assets and liabilities


(535
)


(7,785
)


3,521Cash provided by operating activities


82,959



45,638



83,671INVESTING ACTIVITIES:Proceeds from disposal of property, plant, and equipment






523



115Purchase of investments






(1,408
)


(85,035
)Proceeds from sale of investments






86,442



2,410Capital expenditures


(125,590
)


(64,934
)


(35,836
)Cash provided by (used in) investing activities


(125,590
)


20,623



(118,346
)FINANCING ACTIVITIES:Proceeds from exercise of employee stock options


137



1,760



3,694Borrowings on long-term debt


227,050



1,561



13,729Repayments on long-term debt


(1,081
)


(533
)


Excess tax benefits from stock-based compensation activity


215



4,235



5,102Purchase of common stock held in treasury


(9,090
)


(2,516
)


(896
)Proceeds from government grants


2,842







Financing fees


(1,313
)


(845
)


Cash provided by financing activities


218,760



3,662



21,629Effect of exchange rate changes on cash and cash equivalents


815



(2,444
)


(281
)Increase (decrease) in cash and cash equivalents


176,944



67,479



(13,327
)Cash and cash equivalents at beginning of period


107,505



40,026



53,353Cash and cash equivalents at end of period

$
284,449


$
107,505


$
40,026Supplemental cash flow information:Cash paid for interest

$
4,076


$
883


$
321Cash paid for income taxes

$
61,705


$
80,782


$
16,450Non-cash investing and financing activities:Issuance of Common Stock for restricted stock awards

$
3,125


$
4,944


$
2,475Capital lease obligations incurred

$
13


$
137


$
92   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
 37




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESConsolidated Statements of Comprehensive Income
    and Shareholders Equity 
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
 Accumulated OtherComprehensive Income(Loss)Net Unrealized Gain(Loss) FromCommon Stock


Additional














Minimum


ForeignShares





Paid-In


Deferred


Treasury


Retained


Derivative


Pension


CurrencyOutstanding


Amount


Capital


Comp.


Stock


Earnings


Instruments


Liability


Translation


TotalBalance at December 31, 2005


22,692,047


$
231


$
278,690


$
(3,078
)

$
(4,389
)

$
133,310


$



$
(27,729
)

$
2,617


$
379,652Net income






















75,700















75,700Foreign currency translation


































(433
)


(433
)Adjustment to excess minimum pension net of tax






























5,125







5,125Comprehensive income






































80,392Shares issued for directors compensation


5,904



































Shares issued for restricted stock award plans


46,860



1































1Stock-based compensation expense recognized










4,606



























4,606Treasury stock purchased at cost


(19,871
)














(896
)


















(896
)Exercise of employee options


255,985



2



3,692



























3,694Forfeiture of restricted stock awards


(8,900
)


































Tax benefits from stock-based compensation activity










5,538



























5,538SFAS 123(R) reclassification










(3,078
)


3,078























SFAS 158 adjustment, net of tax






























(10,806
)






(10,806
)Balance at December 31, 2006


22,972,025


$
234


$
289,448


$



$
(5,285
)

$
209,010


$



$
(33,410
)

$
2,184


$
462,181Net income






















92,631















92,631Foreign currency translation


































7,821



7,821Change in unrecognized losses and prior service costs related to
    pension and postretirement benefit plans, net of tax






























3,038







3,038Comprehensive income






































103,490Shares issued for directors compensation


5,279



































Shares issued for restricted stock award plans


57,946



1































1Stock-based compensation expense recognized










6,686



























6,686Treasury stock purchased at cost


(32,195
)














(2,516
)


















(2,516
)Exercise of employee options


102,653



1



1,759



























1,760Tax benefits from stock-based compensation activity










4,182



























4,182Balance at December 31, 2007


23,105,708


$
236


$
302,075


$



$
(7,801
)

$
301,641


$



$
(30,372
)

$
10,005


$
575,784Net income






















55,695















55,695Foreign currency translation


































(13,711
)


(13,711
)Unrecognized losses on derivatives (interest rate swaps), net of
    tax


























(3,325
)










(3,325
)Change in unrecognized losses and prior service costs related to
    pension and postretirement benefit plans, net of tax






























(8,949
)






(8,949
)Comprehensive income






































29,710Shares issued for directors compensation


11,912



































Shares issued for restricted stock award plans


53,750



1































1Stock-based compensation expense recognized










5,155



























5,155Treasury stock purchased at cost


(178,836
)














(9,090
)


















(9,090
)Exercise of employee options


11,602







137



























137Tax benefits from stock-based compensation activity










237



























237Balance at December 31, 2008


23,004,136


$
237


$
307,604


$



$
(16,891
)

$
357,336


$
(3,325
)

$
(39,321
)

$
(3,706
)

$
601,934   The accompanying notes are an integral part of these
    Consolidated Financial Statements.
  38




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements 
    (In thousands, except share and per share amounts, unless
    otherwise indicated)
   Note 1
    ORGANIZATION
    AND OPERATIONS:            just-in-time
  Note 2
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES:  Principles
    of consolidation:
    Use of
    estimates:
    Fair
    value:
    Cash
    equivalents:
   39




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Receivables:
    December 31,2008


2007Trade and commercial customers

$
82,038


$
102,686Less: Allowance for doubtful accounts


(2,260
)


(613
)Total receivables

$
79,778


$
102,073   Inventories:
  last-in, first-in,
    December 31,2008


2007Raw materials and supplies

$
124,689


$
114,967Work-in-process
    and finished goods


228,745



267,462LIFO reserve


(79,104
)


(85,870
)Total inventories

$
274,330


$
296,559     Property,
    plant, and equipment:
   40




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    December 31,2008


2007Land

$
5,274


$
3,241Buildings and improvements


63,775



64,613Machinery and equipment


221,217



188,514Computer hardware and software, furniture and fixtures, and other


49,302



45,042Construction in progress


136,803



49,196$
476,371


$
350,606Less: Accumulated depreciation


(205,309
)


(193,251
)Total property, plant, and equipment, net

$
271,062


$
157,355     Buildings and improvements


20-40 yearsMachinery and equipment


7-15 yearsFurniture and fixtures


5-10 yearsComputer hardware and software


3-10 years         Goodwill
    and intangible assets:
    Goodwill and Other Intangible Assets
     41




---



##### Table of Contents



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


Translation


December 31,2007


Adjustment


2008Titanium Group

$
2,548


$



$
2,548Fabrication Group


38,388



(2,785
)


35,603Distribution Group


9,833







9,833Total goodwill

$
50,769


$
(2,785
)

$
47,984   Intangibles.
  December 31,





Translation


December 31,2007


Amortization


Adjustment


2008Fabrication Group

$
17,476


$
(983
)

$
(3,297
)

$
13,196   Other
    long-lived assets:
  Accounting for
    the Impairment or Disposal of Long-lived Assets
  Environmental:
  site-by-site
  Treasury
    stock:
    Revenue
    and cost recognition:
   42




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
      Shipping
    and handling fees and costs:
    Research
    and development:
    Pensions:
    Employers
    Accounting for Pensions Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    99, 106 and 123(R)
  Other
    post-retirement benefits:
    Employers Accounting for
    Post-retirement Benefits Other than Pensions
   43




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Income
    taxes:
    Accounting for Income Taxes
    Foreign
    currencies:
        Derivative
    financial instruments:
    Accounting for
    Derivative Instruments and Hedging Activities
  Stock-based
    compensation:
  Share-Based Payment
 44




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
            New
    Accounting Standards
  Fair Value
    Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157 FAS 157-2). FAS 157-2
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an amendment of FASB Statement
    No. 115 instrument-by-instrument
 45




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133
  The
    Hierarchy of Generally Accepted Accounting Principles
  Note 3
    EARNINGS
    PER SHARE:  Earnings Per
    Share
 46




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Years Ended December 31,2008


2007


2006Numerator:Net Income

$
55,695


$
92,631


$
75,700Denominator:Basic weighted-average shares outstanding


22,872,075



22,930,768



22,657,225Effect of dilutive shares


115,428



223,426



379,871Diluted weighted-average shares outstanding


22,987,503



23,154,194



23,037,096Basic earnings per share:Basic

$
2.44


$
4.04


$
3.34Diluted

$
2.42


$
4.00


$
3.29     Note 4
    INCOME
    TAXES:    December 31, 2008


December 31, 2007


December 31, 2006Current


Deferred


Total


Current


Deferred


Total


Current


Deferred


TotalFederal

$
42,189


$
(10,100
)

$
32,089


$
64,873


$
(19,007
)

$
45,866


$
25,736


$
13,860


$
39,596State


5,445



(3,474
)


1,971



9,460



(1,767
)


7,693



2,447



1,601



4,048Foreign


2,832



(4,612
)


(1,780
)


3,015



(6,738
)


(3,723
)


1,318



(2,371
)


(1,053
)Total

$
50,466


$
(18,186
)

$
32,280


$
77,348


$
(27,512
)

$
49,836


$
29,501


$
13,090


$
42,591      Years Ended December 31,2008


2007


2006United States

$
103,045


$
157,558


$
122,813Foreign


(15,070
)


(15,091
)


(4,522
)$
87,975


$
142,467


$
118,291  47




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Years Ended December 31,2008


2007


2006Statutory rate of 35% applied to income before income taxes

$
30,791


$
49,864


$
41,402State income taxes, net of federal tax effects


1,017



5,543



2,656Adjustments of tax reserves and prior years income taxes


950



(464
)


(466
)Effects of foreign operations


1,439



(614
)


(301
)Manufacturing deduction


(2,161
)


(3,612
)


(564
)Other


244



(881
)


460Valuation allowance










(596
)Total provision

$
32,280


$
49,836


$
42,591Effective tax rate


36.7
%


35.0
%


36.0
%        48




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    December 31,2008


2007Deferred tax assets:Inventories

$
18,619


$
3,182Postretirement benefit costs


13,326



13,339Employment costs


7,802



7,539Duty drawback claims


2,310



1,605Canadian tax loss carryforwards (expiring 2014 through 2027)


9,453



7,619Pension costs


3,053



1,399Interest rate swap


2,244



Unrealized foreign exchange loss


1,032



Start-up
    costs


1,232



35Other


3,179



1,552Total deferred tax assets


62,250



36,270Valuation Allowance


(1,032
)


Net deferred tax assets


61,218



36,270Deferred tax liabilities:Property, plant and equipment


(9,996
)


(8,875
)Intangible assets


(5,693
)


(6,824
)Unrealized foreign exchange gain






(1,202
)Other


(487
)


(410
)Total deferred tax liabilities


(16,176
)


(17,311
)Net deferred tax asset

$
45,042


$
18,959      49




---



##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Unrecognized Tax Benefits2008


2007Gross balance at January 1

$
2,481


$
2,075Prior period tax positionsIncreases


9



1Decreases


(160
)


(1,175
)Current period tax positions


920



1,580Gross balance at December 31

$
3,250


$
2,481Amount that would affect the effective tax rate if recognized

$
3,095


$
2,311         Note 5
    OTHER
    INCOME (EXPENSE):   50




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Note 6
    LONG-TERM
    DEBT:    December 31,2008


2007RTI term loan

$
225,000


$
RTI Claro credit agreement


11,792



15,862Interest-free loan agreement  Canada


2,995



1,734Other


138



Total debt

$
239,925


$
17,596Less: Current portion


(1,375
)


(1,090
)Long-term debt

$
238,550


$
16,506       15-year
   51




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    2009

$
1,3752010


46,5572011


46,5022012


136,5022013


1,474Thereafter


7,515Total

$
239,925   Note 7
    EMPLOYEE
    BENEFIT PLANS:      Post-RetirementPension Benefit Plans


Benefit Plan2008


2007


2008


2007Change in projected benefit obligation:Projected benefit obligation at beginning of year

$
119,872


$
119,603


$
33,679


$
35,228Service cost


1,941



2,014



517



484Interest cost


7,130



6,913



2,022



2,030Actuarial gain


(7,235
)


(570
)


(1,394
)


(2,280
)Amendment


1,414











Benefits paid


(13,935
)


(8,088
)


(2,452
)


(1,955
)Plan participants contributions










846



Medicare retiree drug subsidy received










146



172Projected benefit obligation at end of year

$
109,187


$
119,872


$
33,364


$
33,679 52




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Post-RetirementPension Benefit Plans


Benefit Plan2008


2007


2008


2007Change in plan assets:Fair value of plan assets at beginning of year

$
105,384


$
96,738


$



$
Actual return on plan assets


(19,798
)


6,734







Employer contributions


10,841



10,000



1,592



1,783Medicare retiree drug subsidy received










146



172Reimbursement to trust


39











Plan participants contributions










846



Benefits paid


(13,935
)


(8,088
)


(2,584
)


(1,955
)Fair value of plan assets at end of year

$
82,531


$
105,384


$



$
Funded status

$
(26,656
)

$
(14,488
)

$
(33,364
)

$
(33,679
)Amounts recognized in the Consolidated Balance Sheets consisted
    of:Current liabilities

$
(121
)

$
(5,962
)

$
(2,632
)

$
(2,660
)Noncurrent liabilities


(26,535
)


(8,526
)


(30,732
)


(31,019
)Net amount recognized

$
(26,656
)

$
(14,488
)

$
(33,364
)

$
(33,679
)     December 31,


December 31,2008


2007


2008


2007Net actuarial loss (gain)

$
55,543


$
38,338


$
(1,715
)

$
(321
)Prior service cost


3,220



2,629



6,758



7,972Total, before tax effect

$
58,763


$
40,967


$
5,043


$
7,651   53




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Post-RetirementPension Benefit Plans


Benefit Plan2008


2007


2008


2007Weighted-average assumptions used to determine benefit
    obligation at December 31:Discount rate


6.70
%


6.25
%


6.70
%


6.25
%Rate of increase to compensation levels


3.80
%


3.80
%


3.80
%


3.80
%Measurement date


12/31/2008



12/31/2007



12/31/2008



12/31/2007Weighted-average assumptions used to determine net periodic
    benefit obligation cost for the years ended December 31:Discount rate


6.25
%


6.00
%


6.25
%


6.00
%Expected long-term return on plan assets


8.50
%


8.50
%


N/A



N/ARate of increase to compensation levels


3.80
%


3.80
%


3.80
%


3.80
%     Dedicated Bond Portfolio
    Pension Benefit Plans


Post-Retirement Benefit Plan2008


2007


2006


2008


2007


2006Service cost

$
1,941


$
2,014


$
2,037


$
517


$
484


$
448Interest cost


7,130



6,913



6,475



2,022



2,030



1,589Expected return on plan assets


(8,874
)


(8,076
)


(8,058
)










Prior service cost amortization


824



693



832



1,214



1,214



175Amortization of actuarial loss


2,148



2,226



2,483











386Settlement charges


2,044



















Net periodic benefit cost

$
5,213


$
3,770


$
3,769


$
3,753


$
3,728


$
2,598  54




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
            −0.25%


+0.25%Effect on total projected benefit obligation (PBO) (in millions)

+$
2.8


−$
2.8Effect on subsequent years periodic pension expense (in millions)

+$
0.2


−$
0.2     2008


2007Asset category:Equity securities


50
%


56
%Debt securities and other short-term investments


49
%


42
%Cash


1
%


2
%Total


100
%


100
%     Asset category:Equity securities


56
%Debt securities and other short-term investments


42
%Cash


2
%Total


100
%    55




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
      Other post-retirement benefit plans.
      Post-Retirement


Post-RetirementPension


Benefit Plan


Benefit Plan (notBenefit


(including Plan D


including Plan DPlans


subsidy)


subsidy)2009

$
8,168


$
2,632


$
2,9752010


8,199



2,639



3,0032011


8,297



2,638



3,0212012


8,444



2,592



3,0112013


8,474



2,532



2,9822014 to 2018


43,965



12,126



14,291     Supplemental pension plan.
  Excess pension plan.
   56




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Note 8
    LEASES:      Operating


Capital2009


4,013



662010


3,107



392011


1,958



352012


1,564



152013


677



Thereafter


22



Total lease payments

$
11,341



155Less: Interest portion






(37
)Amount recognized as capital lease obligations





$
118   Note 9
    BILLINGS
    IN EXCESS OF COSTS AND ESTIMATED EARNINGS:    Note 10
    TRANSACTIONS
    WITH RELATED PARTIES:    Note 11
    SEGMENT
    REPORTING:  Disclosures about Segments of an Enterprise
    and Related Information (SFAS 131)
   57




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
      just-in-time
     58




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Years Ended December 31,2008


2007


2006Net sales:Titanium Group

$
202,024


$
253,130


$
204,881Intersegment sales


151,910



181,200



151,983Total Titanium Group net sales


353,934



434,330



356,864Fabrication Group


146,816



131,961



83,056Intersegment sales


79,027



71,664



80,418Total Fabrication Group net sales


225,843



203,625



163,474Distribution Group


261,060



241,708



217,452Intersegment sales


2,628



4,349



2,896Total Distribution Group net sales


263,688



246,057



220,348Eliminations


233,565



257,213



235,297Total consolidated net sales

$
609,900


$
626,799


$
505,389Operating income:Titanium Group before corporate allocations

$
76,883


$
113,469


$
86,767Corporate allocations


(15,123
)


(10,886
)


(8,306
)Total Titanium Group operating income


61,760



102,583



78,461Fabrication Group before corporate allocations


12,781



12,351



17,712Corporate allocations


(10,744
)


(8,840
)


(9,665
)Total Fabrication Group operating income


2,037



3,511



8,047Distribution Group before corporate allocations


32,561



41,716



35,529Corporate allocations


(8,966
)


(6,649
)


(6,784
)Total Distribution Group operating income


23,595



35,067



28,745Total consolidated operating income

$
87,392


$
141,161


$
115,253Income before income taxes:Titanium Group

$
64,814


$
105,176


$
80,198Fabrication Group


(1,036
)


1,832



8,697Distribution Group


24,197



35,459



29,396Total consolidated income before income taxes

$
87,975


$
142,467


$
118,291   59




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  Years Ended December 31,2008


2007


2006Revenue by Market Information:Titanium GroupCommercial aerospace

$
123,904


$
153,834


$
108,881Defense


60,829



62,937



46,189Industrial and consumer


17,291



36,359



49,811Total Titanium Group net sales


202,024



253,130



204,881Fabrication GroupCommercial aerospace

$
55,691


$
49,885


$
20,375Defense


28,193



31,491



21,562Industrial and consumer


62,932



50,585



41,119Total Fabrication net sales


146,816



131,961



83,056Distribution GroupCommercial aerospace

$
126,116


$
109,162


$
100,382Defense


116,838



112,857



93,252Industrial and consumer


18,106



19,689



23,818Total Distribution Group net sales


261,060



241,708



217,452Total consolidated net sales

$
609,900


$
626,799


$
505,389Geographic location of trade sales:United States

$
418,658


$
466,307


$
395,959England


39,084



40,566



38,067France


62,929



43,085



32,651Germany


26,143



27,599



8,575Canada


20,221



14,896



14,653Italy


5,997



6,281



2,587Japan


11,894



5,475



334Spain


6,627



5,446



2,030Other countries


18,347



17,144



10,533Total trade sales

$
609,900


$
626,799


$
505,389Capital expenditures:Titanium Group

$
107,157


$
39,599


$
12,740Fabrication Group


17,410



24,447



22,016Distribution Group


1,023



888



1,080Total capital expenditures

$
125,590


$
64,934


$
35,836Depreciation and amortization:Titanium Group

$
11,624


$
9,539


$
9,284Fabrication Group


7,736



5,551



4,762Distribution Group


841



622



246Total depreciation and amortization

$
20,201


$
15,712


$
14,292  60




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
     December 31,2008


2007Property, plant, and equipment:United States

$
418,135


$
291,101England


4,761



3,930France


1,437



1,253Canada


52,038



54,322Less: Accumulated depreciation


(205,309
)


(193,251
)Property, plant, and equipment, net

$
271,062


$
157,355Total assets:Titanium Group

$
374,999


$
281,238Fabrication Group


224,534



226,445Distribution Group


155,838



145,953General corporate assets


273,832



101,648Total consolidated assets

$
1,029,203


$
755,284       Note 12
    COMMITMENTS
    AND CONTINGENCIES:    Environmental
    Matters
   61




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
  96-1, Environmental Remediation Liabilities Accounting for Contingencies
          Environmental


EnvironmentalAssets


LiabilitiesBalance at December 31, 2007

$
863


$
(2,874
)Environmental-related income (expense)


(500
)


(433
)Cash paid (received)


(363
)


1,048Balance at December 31, 2008

$



$
(2,259
)     Active Investigative or Cleanup Sites.
  Ashtabula River.
  Reserve Environmental Services Landfill.
 62




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Duty
    Drawback Investigation
            Other
    Matters
   63




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
    Note 13
    STOCK
    OPTIONS AND RESTRICTED STOCK AWARD PLANS:          2008


2007


2006Risk-free interest rate


2.81
%


4.67
%


4.37
%Expected dividend yield


0.00
%


0.00
%


0.00
%Expected lives (in years)


4.0



5.0



5.0Expected volatility


41.00
%


42.00
%


40.00
%    64




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##### Table of Contents



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


Remaining


AggregateAverage


Contractual


IntrinsicStock Options

Shares


Exercise Price


Term (Years)


ValueOutstanding at December 31, 2007


312,916


$
35.74Granted


54,600



51.17Forfeited


(1,235
)


60.57Expired


(1,999
)


23.20Exercised


(11,602
)


11.86Outstanding at December 31, 2008


352,680


$
38.90



6.57


$
238Exercisable at December 31, 2008


228,736


$
27.58



5.59


$
238         Weighted-AverageGrant-DateFair ValueNonvested Restricted Stock Awards

Shares


Per ShareNonvested at December 31, 2007


124,642


$
53.01Granted


65,662



47.59Vested


(28,635
)


49.95Nonvested at December 31, 2008


161,669


$
51.35      65




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##### Table of Contents



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


Maximum SharesPerformance Share Awards

Granted


Eligible to ReceiveOustanding at December 31, 2007






Granted


28,500



57,000Outstanding at December 31, 2008


28,500



57,000     Note 14
    FINANCIAL
    INSTRUMENTS:       66




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Notes to
    Consolidated Financial Statements
  (In
    thousands, except share and per share amounts, unless otherwise
    indicated)
      Note 15
    SELECTED
    QUARTERLY FINANCIAL INFORMATION (UNAUDITED):    1st


2nd


3rd


4th2008

Quarter


Quarter


Quarter


QuarterNet Sales

$
150,648


$
159,829


$
150,615


$
148,808Gross profit


52,058



49,203



37,123



28,890Operating income


33,226



30,894



17,845



5,427Net income


22,237



18,613



11,252



3,593Earnings per share:Basic

$
0.97


$
0.82


$
0.49


$
0.16Diluted

$
0.96


$
0.81


$
0.49


$
0.16   1st


2nd


3rd


4th2007

Quarter


Quarter


Quarter


QuarterNet Sales

$
145,557


$
154,046


$
163,412


$
163,784Gross profit


51,545



47,326



53,696



55,561Operating income


32,886



31,914



36,950



39,411Net income


22,073



20,950



24,692



24,916Earnings per share:Basic

$
0.97


$
0.91


$
1.08


$
1.08Diluted

$
0.95


$
0.90


$
1.06


$
1.08   Note 16
    SUBSEQUENT
    EVENTS:   67




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Disclosure
    controls and procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    report on internal control over financial reporting
  Rule 13a-15(f).
  Internal Control  Integrated Framework
    Changes
    in internal control over financial reporting
    Item 9B.
    Other
    Information    PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance.     68




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##### Table of Contents



Item 11.
    Executive
    Compensation.    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    Equity
    Compensation Plan Information
  (c) Number ofSecurities RemainingAvailable for Future(a) Number of





Issuance Under EquitySecurities to be





Compensation PlansIssued Upon Exercise


(b) Weighted-Average


(Excluding Securitiesof Outstanding


Exercise Price of


Reflected in ColumnPlan Category

Options


Outstanding Options


(a))Equity compensation plans approved by security holders (see Note
    (i) and Note (iii))


346,680


$
39.40



2,008,795Equity compensation plans not approved by security holders (see
    Note (ii))


6,000



9.90



352,680


$
38.90



2,008,795   Note (i): 10-year
  Note (ii):
  Note (iii):
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence.   69




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services.   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.          Exhibits
    ExhibitNo.

Description2
.1

Amended and Restated Reorganization Agreement, incorporated by
    reference to Exhibit 2.1 to the Companys Registration
    Statement on
    Form S-1
    No. 33-30667
    Amendment No. 1.3
.1

Amended and Restated Articles of Incorporation of the Company,
    effective April 29, 1999, incorporated by reference to
    Exhibit 3.1 to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 1999.3
.2

Amended Code of Regulations of the Company, incorporated by
    reference to Exhibit 3.3 to the Companys Registration
    Statement on
    Form S-4
    No. 333-61935.3
.3

RTI International Metals, Inc. Code of Ethical Business Conduct,
    incorporated by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003.4
.1

Amended and Restated Credit Agreement dated September 8,
    2008, incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    for the event dated September 8, 2008.4
.2

Offer of loan by and among RTI-Claro, Inc., as borrower and
    Investissement Quebec, dated August 3, 2006, incorporated
    by reference to the Companys Quarterly Report on
    Form 10-Q
    for quarterly period ended September 30, 2006.4
.3

Credit Agreement between RTI Claro, Inc., as borrower, RTI
    International Metals Inc., as guarantor, and National City Bank,
    Canada Branch, as lender, dated as of December 27, 2006,
    incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    for the event dated December 27, 2006.4
.4

Second Credit Amending Agreement dated September 27, 2007,
    related to the Credit Agreement between RTI-Claro, Inc., as
    borrower, RTI International Metals Inc., as guarantor, and
    National City Bank, Canada Branch, as lender, incorporated
    by reference to Exhibit 10.2 to the Companys Current
    Report on
    Form 8-K
    for the event dated September 27, 2007.4
.5

Credit Amending Agreement dated September 8, 2008, related
    to the Credit Agreement between RTI-Claro, Inc., as borrower,
    RTI International Metals, Inc., as guarantor, and National City
    Bank, Canada Branch, as lender, incorporated by reference to
    Exhibit 10.2 to the Companys Current Report on
    Form 8-K
    for the event dated September 8, 2008.10
.1*

RTI International Metals, Inc. Supplemental Pension Program
    effective August 1, 1987, as amended and restated
    October 26, 2007, incorporated by reference to
    Exhibit 10.1 to the Companys Annual Report on From
    10-K for the
    year ended December 31, 2007.10
.2*

RTI International Metals, Inc. Excess Benefits Plan effective
    July 18, 1991, and restated October 26, 2007,
    incorporated by reference to Exhibit 10.2 to the
    Companys Annual Report on From
    10-K for the
    year ended December 31, 2007.10
.3*

RTI International Metals, Inc., 1995 Stock Plan incorporated by
    reference to Exhibit 10.11 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 1995. 70




---



##### Table of Contents



ExhibitNo.

Description10
.4*

Amended and restated employment agreement, dated
    December 31, 2008, between the Company and Dawne S.
    Hickton, incorporated by reference to Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K
    for the event dated December 31, 2008.10
.5*

Amended and restated employment agreement, dated
    December 31, 2008, between the Company and William T. Hull,
    incorporated by reference to Exhibit 10.4 to the
    Companys Current Report on
    Form 8-K
    for the event dated December 31, 2008.10
.6*

Letter Agreement, dated December 3, 2003, between the
    Company and T.G. Rupert, with respect to retirement benefits,
    incorporated by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003.10
.7*

Amended and restated employment agreement, dated
    December 31, 2008, between the Company and Stephen R.
    Giangiordano, incorporated by reference to Exhibit 10.3 to
    the Companys Current Report on
    Form 8-K
    for the event dated December 31, 2008.10
.8*

Amended and restated employment agreement, dated
    December 31, 2008, between the Company and Michael C.
    Wellham, incorporated by reference to Exhibit 10.2 to the
    Companys Current Report on
    Form 8-K
    for the event dated December 31, 2008.10
.9*

Amended and restated employment agreement, dated
    December 31, 2008, between the Company and Chad Whalen,
    incorporated by reference to Exhibit 10.6 to the
    Companys Current Report on
    Form 8-K
    for the event dated December 31, 2008.10
.10*

Amended and Restated Executive Non-Change in Control Severance
    Policy, as amended December 31, 2008, incorporated by
    reference to Exhibit 10.7 to the Companys Current
    Report on
    Form 8-K
    for the event dated December 31, 2008.10
.11*

Amended and Restated Executive Change in Control Severance
    Policy, as amended December 31, 2008, incorporated by
    reference to Exhibit 10.8 to the Companys Current
    Report on
    Form 8-K
    for the event dated December 31, 2008.10
.12*

RTI International Metals, Inc. 2004 Stock Plan effective
    January 28, 2005, as amended January 26, 2007,
    incorporated by reference to Exhibit 10.12 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2006.10
.13*

Form of Non-Qualified Stock Option Grant under the RTI
    International Metals, Inc. 2004 Stock Plan, incorporated by
    reference to Exhibit 10.13 to the Companys Annual
    Report on
    Form 10-K
    filed on April 14, 2005.10
.14*

Form of Restricted Stock Grant under the RTI International
    Metals, Inc. 2004 Stock Plan, incorporated by reference to
    Exhibit 10.14 to the Companys Annual Report on
    Form-10K for the year ended December 31, 2004.10
.15*

Form of Performance Share Award under the RTI International
    Metals, Inc. 2004 Stock Plan, incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on
    Form 8-K
    for the event dated January 25, 2008.10
.16*

RTI International Metals, Inc. Board of Directors Compensation
    Program, as amended July 27, 2007, incorporated by
    reference to Exhibit 10.26 to the Companys Annual
    Report on From
    10-K for the
    year ended December 31, 2007.10
.17*

Form of indemnification agreement, incorporated by reference to
    Exhibit 10.3 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended March 31, 2007.10
.18*

Pay philosophy and guiding principles covering officer
    compensation incorporated by reference to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2005.10
.19

2005 Settlement with the U.S. Department of Energy, incorporated
    by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005.10
.20

Procurement Frame Contract between EADS Deutschland GmbH and RTI
    International Metals, Inc. dated April 26, 2006,
    incorporated by reference to the Companys Quarterly Report
    on
    Form 10-Q
    for the quarterly period ended June 30, 2006.10
.21

Titanium Sponge Supply Agreement, dated January 1, 2007,
    between the Company and Sumitomo Titanium Corporation and its
    affiliates, incorporated by reference to Exhibit 10.9 to
    the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended March 31, 2007 71




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##### Table of Contents



ExhibitNo.

Description10
.22

Amendment to Long-Term Supply Agreement, dated May 30,
    2007, between the Company and Lockheed Martin Corporation and
    its affiliates, incorporated by reference to Exhibit 10.1
    to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended June 30, 2007.10
.23

Supplemental long-term Supply Agreement, dated
    September 17, 2007, between the Company and EADS
    Deutschland GmbH as Lead Buyer for the European Aeronautic
    Defense Space group of companies, incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    for the quarterly period ended September 30, 2007.10
.24*

Amended and restated employment agreement, dated
    December 31, 2008, between the Company and William F.
    Strome, incorporated by reference to Exhibit 10.5 to the
    Companys Current Report on
    Form 8-K
    for the event dated December 31, 2008.10
.25

RTI International Metals, Inc. 2002 Non-Employee Director Stock
    Option Plan, incorporated by reference to Exhibit 4.3 to
    the Companys Registration Statement on
    Form S-8
    dated February 19, 2002.10
.26

Master Supply Agreement, dated March 25, 2008, between RTI
    Hamilton, Inc., and Tronox LLC, incorporated by reference to
    Exhibit 10.1 to the Companys Current Report on From
    8-K for the
    event dated March 25, 2008.21
.1

Subsidiaries of the Company, filed herewith.23
.1

Consent of independent registered public accounting firm, filed
    herewith.24
.1

Powers of Attorney, filed herewith.31
.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 2002,
    filed herewith.31
.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 2002,
    filed herewith.32
.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 2002, filed
    herewith.32
.2

Certification of Chief Financial Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002, filed
    herewith.     *
    
    Denotes management contract or compensatory plan, contract or
    arrangement 72




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##### Table of Contents



SIGNATURES      By
    /s/  William
    T. Hull   Senior Vice President and Chief Financial Officer
      Signature and Title

DateCRAIG R. ANDERSSON, Director;DANIEL I. BOOKER, Director;DONALD P. FUSILLI, JR., Director,RONALD L. GALLATIN, Director;CHARLES C. GEDEON, Director;ROBERT M. HERNANDEZ, Director;EDITH E. HOLIDAY, Director;BRYAN T. MOSS, Director;JAMES A. WILLIAMS, Director;by:/s/  Dawne
    S. HicktonDawne
    S. Hickton
    As
    Attorney-in-Fact

February 18, 2009/s/  Dawne
    S. HicktonDawne
    S. Hickton
    Vice Chairman, Chief Executive Officer and Director

February 18, 2009/s/  William
    T. HullWilliam
    T. Hull
    Senior Vice President and Chief Financial Officer

February 18, 2009/s/  Michael
    C. WellhamMichael
    C. Wellham
    President, Chief Operating Officer and Director

February 18, 2009  73




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##### Table of Contents



RTI
    INTERNATIONAL METALS, INC. AND SUBSIDIARIES
  Schedule II 
    Valuation and Qualifying Accounts
  (In
    thousands)
  (Charged)


(Charged)Balance at


Credited to


Credited to


BalanceBeginning


Costs and


Other


at EndDescription

of Year


Expenses


Accounts


of YearYear ended December 31, 2008:Allowance for doubtful accounts

$
(613
)

$
(1,647
)

$



$
(2,260
)Valuation allowance for deferred income taxes










(1,032
)


(1,032
)Year ended December 31, 2007:Allowance for doubtful accounts


(1,548
)


893



42



(613
)Valuation allowance for deferred income taxes


(35
)


35







Allowance for U.S. Customs on duty drawback


(608
)






608



Year ended December 31, 2006:Allowance for doubtful accounts


(1,604
)


16



40



(1,548
)Valuation allowance for deferred income taxes


(631
)






596



(35
)Allowance for U.S. Customs on duty drawback


(663
)


55







(608
)  S-1