EXHIBIT 99.1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Participants and Administrator of RMI Titanium Company Employee Savings and Investment Plan In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of RMI Titanium Company Employee Savings and Investment Plan (the "Plan") at December 31, 2003 and December 31, 2002, and the changes in net assets available for benefits for the year ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2003 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Pittsburgh, Pennsylvania June 25, 2004 RMI TITANIUM COMPANY EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2003 AND 2002 2003 2002 ------------ ------------ Investments at fair value $ 14,947,673 $ 12,715,602 Employee contributions receivable 75,933 45,944 ------------ ------------ Net assets available for benefits $ 15,023,606 $ 12,761,546 ============ ============ THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. RMI TITANIUM COMPANY EMPLOYEE SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2003 2003 ----------- Contributions: Employee $ 929,241 Investment income: Interest and dividend income 306,824 Net appreciation in fair value of investments 2,126,539 ----------- Total Investment Income 2,433,363 Transfers (441,106) ----------- Total increase 2,921,498 Participants' benefits paid (659,438) ----------- Increase in net assets 2,262,060 Net assets available for benefits Beginning of year 12,761,546 ----------- End of year $15,023,606 =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. RMI TITANIUM COMPANY EMPLOYEE SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002 NOTE 1 - SUMMARY OF ACCOUNTING POLICIES: The financial statements of the RMI Titanium Company Employee Savings and Investment Plan (the Plan) have been prepared in conformity with accounting principles generally accepted in the United States of America. The following are the significant accounting policies followed by the Plan: ACCOUNTING METHOD The financial statements of the Plan use the accrual method of accounting. USE OF ESTIMATES The preparation of the Plan's financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make significant estimates that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates. RISKS AND UNCERTAINTIES The Plan provides for various investment options in any combination of mutual funds and other investment securities. The investments are exposed to various risks, such as interest rate, market, and credit risk. It is at least reasonably possible that changes in risks, in the near term, would materially affect participant account balances and the amounts reported in the statement of net assets available for benefits during the reporting period. INVESTMENTS Investments in funds managed by Fidelity Management Trust Company (Fidelity) and RTI International Metals, Inc. common stock are valued at fair market value based on public and Fidelity published quotations. Security transactions are recorded as of the trade date. Participant loans receivable are stated at net realizable value (total borrowings less repaid principal). Investments greater than 5% of the net assets available for benefits as of the end of the Plan year are as follows: 2003 2002 ----------- ----------- Fidelity Magellan Fund $ 4,783,571 $ 3,740,165 Fidelity Managed Income Portfolio 4,023,176 4,121,843 Fidelity Growth and Income Fund 1,667,086 1,509,487 Fidelity Low Priced Stock Fund 1,534,658 1,041,450 Spartan U.S. Equity Index Fund 1,311,547 1,007,429 During 2003, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $ 2,126,539 as follows: 2003 ----------- Mutual funds $ 1,840,019 Common stock 286,520 ----------- $ 2,126,539 =========== NOTES TO FINANCIAL STATEMENTS (CONTINUED) NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of investments, which consists of realized gains and losses from sales of investments and the unrealized appreciation and depreciation in the fair value of its investments. FUNDING The Plan is funded by contributions from participating employees of RMI Titanium Company (the "Company"). The costs of administering the Plan and the trust are borne by the Company. PAYMENT OF BENEFITS Benefits are recorded when paid. NOTE 2 - DESCRIPTION OF PLAN GENERAL The Company is the Plan Sponsor. The Company is a successor to entities that have been operating in the titanium industry since 1951. The following description of the Plan provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. Reference should be made to the Plan agreement for additional information concerning contributions, eligibility, income allocation, withdrawals and other important features of the Plan. The Plan is a defined contribution plan covering full-time salaried, nonrepresented employees who are at least 21 years of age, have completed three months of service, and are a salaried employee at RMI Titanium Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Participants may contribute from 1% to 15% of their salaries through payroll deductions. Contributions are subject to limitations specified in the Internal Revenue Code (IRC). Contributions are directed by the participants into any one or all of the investment options. Changes in allocation of future contributions and transfers of presently invested contributions are permitted pursuant to the Plan document. Participants may change their elections of investment funds by calling the recordkeeper directly or by accessing their accounts via the internet. Participants are 100% vested in their accounts at all times. PAYMENT OF BENEFITS Participants or their beneficiaries are entitled to the full current value of their account in the Plan upon: - Retirement; - Termination of employment with the Company; or - Death Participants may also make written application for withdrawal of all or a portion of their account balance for certain limited situations qualifying as financial hardships under Internal Revenue Service (IRS) guidelines in effect at the time of the withdrawal. NOTES TO FINANCIAL STATEMENTS (CONTINUED) PARTICIPANT LOANS RECEIVABLE Loans are available to all participants subject to provisions set forth in the Plan document. Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to 50% of the existing account balance not to exceed $50,000 in any 12-month period. Loans are treated as a transfer (from) the investment fund to the Participant Loans Receivable fund. Loan repayment terms range from one month to five years and are secured by the balance in the participant's account. Loans bear interest at a rate commensurate with the current market rate when made. Loans made in 2003 and 2002 bear interest at 6.00% and 6.75%, respectively. Interest rates on previous loans range from 6.75% to 15.00%. Principal and interest are paid ratably through monthly payroll deductions. Repayments are transfers to the investment funds (from) the Participant Loans Receivable fund. Loan terms and repayment policies are designed to be in compliance with the requirements of the IRC. TRANSFERS Transfers represent the net of transfers into the Plan from other plans and out of the Plan to other plans. ADMINISTRATION The Plan is administered by the Company's Retirement Board (the "Administrator"). The Board establishes the rules and procedures and interprets the provisions of the Plan. Administrative expenses of the Plan, including legal and audit fees, are paid by the Company and, as such, are not expenses of the Plan. TERMINATION PROVISION The Company anticipates the Plan will continue without interruption, but reserves the right to discontinue the Plan at any time. In the event that such discontinuance results in the termination of the Plan, the Plan provides that each participant shall be fully vested in his or her individual account which includes earnings on the participant's contributions. The individual accounts of the participants shall continue to be administered by the Administrator, or be distributed in a lump sum to the participants, as deemed appropriate by the Administrator. NOTE 3 - INCOME TAXES: The IRS has determined and informed the Company by a letter dated October 9, 2003, that the Plan and related trust are designed in accordance with the applicable sections of the IRC. Therefore, no provision for income taxes has been included in the Plan financial statements. NOTE 4 - RECORDKEEPING Individual participant account balances, allocations and investment options are maintained by Fidelity Investments Institutional Operations Company, Inc., based on enrollment and payroll information supplied by the Company. NOTE 5 - RELATED PARTY TRANSACTIONS Certain investments of the Plan are managed by Fidelity, the trustee of the Plan. The Plan also invests in common stock of the Company. These represent party-in-interest transactions. SCHEDULE H, LINE 4i SCHEDULE OF ASSETS (HELD AT END OF YEAR) RMI TITANIUM COMPANY EMPLOYEE SAVINGS AND INVESTMENT PLAN DECEMBER 31, 2003 EIN: 31-0875005, PLAN#: 005 (c) Description of investment including (b) Identity of issue, borrower, lessor or maturity date, rate of interest, collateral, par, (e) Current (a) similar party or maturity value (d) Cost Value * Fidelity Magellan Fund Mutual Fund $ 4,783,571 * Fidelity Growth and Income Fund Mutual Fund 1,667,086 * Fidelity Low Priced Stock Fund Mutual Fund 1,534,658 * Fidelity Worldwide Fund Mutual Fund 419,515 * Fidelity Mid-Cap Stock Fund Mutual Fund 126,129 * Fidelity Freedom Income Fund Mutual Fund 13,438 * Fidelity Freedom 2000 Fund Mutual Fund 782 * Fidelity Freedom 2010 Fund Mutual Fund 5,429 * Fidelity Freedom 2020 Fund Mutual Fund 15,445 * Fidelity Freedom 2030 Fund Mutual Fund 4,159 * Fidelity Freedom 2040 Fund Mutual Fund 15,646 * Fidelity Managed Income Portfolio Mutual Fund 4,023,176 * Spartan U.S. Equity Index Fund Mutual Fund 1,311,547 * Fidelity Ginnie Mae Fund Mutual Fund 238,450 * RTI International Metals, Inc. Stock Account Common Stock 656,289 * Participant Loans Receivable Interest Rates High 15.00%, Low 6.00% 132,353 ----------- TOTAL: $14,947,673 =========== * DENOTES PARTY-IN-INTEREST