<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM __________ TO _________
Commission File Number 1-10319
RMI TITANIUM COMPANY
(Exact name of registrant as specified in its charter)
OHIO 31-0875005
(State of Incorporation) (I.R.S. Employer
Identification No.)
1000 WARREN AVENUE, NILES, OHIO 44446
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 330-544-7700
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<PAGE> 2
FORM 10-K/A
AMENDMENT NO. 1 TO
ANNUAL REPORT
ON
FORM 10-K
FOR THE YEAR ENDED
DECEMBER 31, 1996
OF
RMI TITANIUM COMPANY
Pursuant to Rule 12b-15, promulgated under the Securities Exchange Act of
1934, RMI Titanium Company hereby amends each of the following Items of its
Annual Report on Form 10-K for the year ended December 31, 1996, so that, as
amended, such Items read as set forth herein.
Index to Exhibits
Exhibit 23.1
Exhibit 99.1
Exhibit 99.2
<PAGE> 3
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
- ------- --------------------------------------------------------------------------------------
<C> <S> <C>
2.0 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 Articles of Incorporation of the Company, as amended March 31, 1994,
incorporated by reference to Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1994.
3.2 Amended Code of Regulations of the Company, incorporated by reference
to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1993.
4.1 Credit Agreement dated as of April 15, 1996 by and among RMI Titanium
Company, an Ohio corporation, and PNC Bank, National Association,
incorporated by reference to the Company's Registration Statement on
Form S-3 No. 333-01553 Amendment No. 2.
10.1 Agreement for the sale and purchase of titanium tetrachloride between
SCM Chemicals, Inc., and RMI Titanium Company dated March 9, 1993
incorporated by reference to Exhibit 10.13 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992.+
10.2 Agreement for the supply, purchase and sale of chlorine between SCM
Chemicals, Inc., and RMI Titanium Company dated as of November 13,
1990, incorporated by reference to Exhibit 10.3 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1990.
10.3 RMI Company Annual Incentive Compensation Plan, incorporated by
reference to Exhibit 10.3 to the Company's Registration Statement on
Form S-1 No. 33-30667 Amendment No. 2.
10.4 RMI Titanium Company 1989 Stock Option Incentive Plan, incorporated by
reference to Exhibit 10.4 to the Company's Registration Statement on
Form S-1 No. 33-30667 Amendment No. 2.
10.5 RMI Titanium Company Supplemental Pension Plan effective August 1,
1987, and amended as of December 12, 1990, incorporated by reference
to Exhibit 10.8 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1990.
10.6 RMI Titanium Company 1989 Employee Restricted Stock Award Plan,
incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement on Form S-1, No. 33-30667 Amendment No. 2.
10.7 Amendment to RMI Titanium Company 1989 Employee Restricted Stock Award
Plan, incorporated by reference to Exhibit 10.10 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1990.
10.8 RMI Titanium Company Excess Benefits Plan effective July 18, 1991,
incorporated by reference to Exhibit 10.11 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1991.
10.9 Sales Agreement for the supply of titanium sponge and plasma
electrodes between Oregon Metallurgical Corporation and RMI Titanium
Company dated as of August 8, 1994, incorporated by reference to
Exhibit 10.9 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995.+
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
- ------- --------------------------------------------------------------------------------------
<C> <S> <C>
10.10 Sales Agreement for the supply of titanium sponge between Osaka
Titanium Co., Ltd., Sumitomo Corporation, Sumitomo Corporation of
America, and RMI Titanium Company dated as of September 4, 1992,
incorporated by reference to Exhibit 10.10 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.+
10.11 RMI Titanium Company 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.
10.12 Employment agreement, dated September 1, 1996, between the Company and
John H. Odle, incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1996.
10.13 Employment agreement, dated September 1, 1996, between the Company and
T. G. Rupert, incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1996.
10.14 Employment agreement, dated February 1, 1997, between the Company and
Harry B. Watkins, incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996.
10.15 Registration Rights Agreement dated August 21, 1996 between the
Company and USX Corporation, incorporated by reference to Exhibit 10.3
to the Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1996.
21 Subsidiaries of the Company (Previously Filed).
23.1 Consent of Price Waterhouse LLP.
24 Powers of Attorney (Previously Filed).
27 Financial Data Schedule (Previously Filed).
99.1 Financial Statements of The RMI Titanium Company Employees Savings and
Investment Plan for the year ended December 31, 1996 (filed herewith).
99.2 Financial Statements of The RMI Titanium Company Bargaining Unit
Employees Savings and Investment Plan for the year ended December 31,
1996 (filed herewith).
</TABLE>
- ---------
+ Confidential treatment has been requested.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-38559) of RMI Titanium Company of our report dated
May 30, 1997, appearing on page 1 of the Annual Report of The RMI Titanium
Company Employee Savings and Investment Plan which appears as Exhibit 99.1 to
the Annual Report on Form 10-K of RMI Titanium Company for the year ended
December 31, 1996, as amended by this Form 10-K/A. We also consent to the
incorporation by reference in the Registration Statement on Form S-8 (No.
33-38340) of RMI Titanium Company of our report dated May 30, 1997, appearing on
page 1 of the Annual Report of The RMI Titanium Company Bargaining Unit
Employees Savings and Investment Plan which appears as Exhibit 99.2 to the
Annual Report on Form 10-K of RMI Titanium Company for the year ended December
31, 1996, as amended by this Form 10-K/A.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
June 19, 1997
<PAGE> 1
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS AND INVESTMENT PLAN
ANNUAL REPORT
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
EXHIBIT 99.1
<PAGE> 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of RMI Titanium Company Employees
Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the RMI Titanium Company Employees Savings and Investment Plan (the Plan) at
December 31, 1996 and 1995, and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles. 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 generally accepted auditing standards which 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 the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedules I and II is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by the Employee Retirement Income Security Act of 1974. The Fund
Information in the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the changes
in net assets available for benefits of each fund. Schedules I and II and the
Fund Information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
May 30, 1997
<PAGE> 3
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Investments, at fair value:
Fidelity Magellan Mutual Fund Account............................ $3,270,017 $3,211,118
Fidelity Advisor Income and Growth Account....................... 115,611 85,780
CIGNA Stock Market Index Account................................. 343,352 78,057
CIGNA International Equity Account............................... 469,416 376,105
RMI Titanium Company Common Stock Account........................ 471,950 191,475
Participant Loans Receivable..................................... 180,311 114,235
---------- ----------
4,850,657 4,056,770
Investments, at contract value:
Connecticut General Life Insurance Co. Guaranteed
"Long-Term" Account........................................... 3,425,458 2,970,415
---------- ----------
Net assets available for benefits................................ $8,276,115 $7,027,185
========= =========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
1
<PAGE> 4
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
FIDELITY CIGNA
CIGNA FIDELITY ADVISOR STOCK CIGNA RMI
GUARANTEED MAGELLAN INCOME & MARKET INT'L. TITANIUM CO. PARTICIPANT
"LONG-TERM" MUTUAL FUND GROWTH INDEX EQUITY COMMON STOCK LOANS
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT RECEIVABLE TOTAL
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Employees'
contributions... $ 280,921 $ 230,252 $49,164 $ 61,842 $ 61,977 $ 18,006 $ -- $ 702,162
Investment
income:
Interest and
dividend
income..... 179,432 520,722 -- -- -- -- 13,670 713,824
Net
appreciation
(depreciation)
in fair
value of
investments... -- (172,095) 9,192 34,617 40,762 391,245 -- 303,721
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
179,432 348,627 9,192 34,617 40,762 391,245 13,670 1,017,545
Transfers.... 168,113 (399,178) (14,403) 168,839 22,636 (48,067) 52,406 (49,654)
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Total net
additions
(deductions)... 628,466 179,701 43,953 265,298 125,375 361,184 66,076 1,670,053
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Participant's
benefits
paid......... (173,423) (120,802) (14,122) (3) (32,064) (80,709) -- (421,123)
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Total net
deductions... (173,423) (120,802) (14,122) (3) (32,064) (80,709) -- (421,123)
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Increase
(decrease) in
net assets... 455,043 58,899 29,831 265,295 93,311 280,475 66,076 1,248,930
Net assets
available for
benefits:
Beginning of
year....... 2,970,415 3,211,118 85,780 78,057 376,105 191,475 114,235 7,027,185
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
End of
year....... $3,425,458 $3,270,017 $115,611 $343,352 $469,416 $471,950 $ 180,311 $8,276,115
============ ============ ======== ======== ======== =========== ========= =========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
2
<PAGE> 5
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
FIDELITY CIGNA
CIGNA FIDELITY ADVISOR STOCK CIGNA RMI
GUARANTEED MAGELLAN INCOME & MARKET INT'L. TITANIUM CO. PARTICIPANT
"LONG- TERM" MUTUAL FUND GROWTH INDEX EQUITY COMMON STOCK LOANS
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT RECEIVABLE TOTAL
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Employees'
contributions... $ 253,825 $ 219,744 $13,976 $9,159 $ 42,446 $ 9,360 $ -- $ 548,510
Investment
Income:
Interest and
dividend
income...... 170,854 185,554 -- -- -- -- 12,173 368,581
Net
appreciation
in fair
value of
investments... -- 625,671 11,491 17,026 34,663 50,474 -- 739,325
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
170,854 811,225 11,491 17,026 34,663 50,474 12,173 1,107,906
Transfers..... 11,501 2,957 (7,569) 16,831 (17,454) 39,375 (1,645) 43,996
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
Total net
additions... 436,180 1,033,926 17,898 43,016 59,655 99,209 10,528 1,700,412
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
Participant's
benefits
paid.......... (196,918) (83,928) -- (7,039) -- (115) (8,385) (296,385)
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
Total net
deductions... (196,918) (83,928) -- (7,039) -- (115) -- (296,385)
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
Increase in net
assets........ 239,262 949,998 17,898 35,977 59,655 99,094 2,143 1,404,027
Net assets
available for
benefits:
Beginning of
year........ 2,731,153 2,261,120 67,882 42,080 316,450 92,381 112,092 5,623,158
-------------- ------------ -------- ------- -------- ------------ ----------- ----------
End of year... $2,970,415 $3,211,118 $85,780 $78,057 $376,105 $191,475 $ 114,235 $7,027,185
=========== ============= ========= ======= ======== ============ ========= =========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
3
<PAGE> 6
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1--SUMMARY OF ACCOUNTING POLICIES:
ACCOUNTING METHOD
The financial statements of the RMI Titanium Company Savings and Investment
Plan (the Plan) use the accrual method of accounting.
USE OF ESTIMATES
Generally accepted accounting principles require management to make certain
estimates and assumptions relating primarily to the fair market value of certain
Plan assets. For additional information on the fair market value of Plan assets
see "Investments" below.
INVESTMENTS
Available investment options are as follows:
Fidelity Magellan Mutual Fund Account (a mutual fund)
RMI Titanium Company Common Stock
Connecticut General Life Insurance Company Guaranteed "Long-Term"
Account (guaranteed investment contract)
Funds managed by CIGNA or Connecticut General Life Insurance Company, a
wholly-owned subsidiary of CIGNA:
Stock Market Index Account
Fidelity Advisor Income and Growth Account
International Equity Account
Investments in the Fidelity Magellan Mutual Fund and RMI Titanium Company
Common Stock are valued at fair market value based on published quotations. The
guaranteed investment contract is valued at contract value, which approximates
fair market value, and includes approximately $50,000 of assets as of December
31, 1996, which will be allocated in accordance with participants chosen
investment elections in effect at the time the funds were withheld. All CIGNA
managed funds are valued by CIGNA based on the published quotations of the
underlying investments within each of the funds and reflect current market
value. Security transactions are recorded as of the settlement date.
FUNDING
The Plan is funded by contributions from the 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 Plan Sponsor is RMI Titanium Company (the Company). The Company is a
successor to entities that have been operating in the titanium industry since
1958. The Company's operations are conducted primarily in one business segment,
the production and marketing of titanium metal and related products.
4
<PAGE> 7
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.
The Plan is a defined contribution plan covering full-time salaried,
nonrepresented employees who are at least 21 years of age and have one year of
service. Effective July 1, 1996, eligibility was amended to at least 21 years of
age and three months of service. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participants may contribute from 1% to 15% of salary through payroll
deduction. Pre-tax contributions are subject to annual limitations as prescribed
by law ($9,500 in 1996). Certain highly compensated participants, as defined by
the Internal Revenue Code, may contribute from 1% to 7% of salary through
payroll deduction. Contributions are directed by the participants into any one
or all of the investment options. Participants may change their elections of
investment funds by calling the recordkeeper directly or by completing a new
enrollment and change form and submitting it to the employee benefits department
at least 15 days in advance. 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 to the administrator for
withdrawal of all or a portion of their account balance for certain limited
situations qualifying as financial hardships under Internal Revenue Service
guidelines in effect at the time of withdrawal.
PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to 50% of the existing account balance. 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 account. Loans bear interest at a rate commensurate
with the current market rate when made. Loans made in 1996 bear interest at
8.75%. Interest rates on loans made prior to 1996 range from 8.75% 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.
TRANSFERS
Transfers represents net inter-plan and inter-fund transfers.
ADMINISTRATOR
The Plan's administrator is the Company's Retirement Board. The Board
establishes rules of procedures and interprets the provisions 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 with the amount in his/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.
5
<PAGE> 8
NOTE 3--INCOME TAXES:
The Internal Revenue Service (IRS) has determined and informed the Company
by a letter dated April 30, 1996, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan administrator believes that the Plan is currently being operated in
compliance with the applicable requirements of the IRC. Therefore, no provision
for income taxes has been included in the Plan financial statements.
NOTE 4--RECORDKEEPING
Individual participant account balances, allocation and investment options
are maintained by CIGNA based on enrollment and payroll information supplied by
the Company.
NOTE 5--SUBSEQUENT EVENT
Effective February 1, 1997, the Company changed the Plan Recordkeeper from
CIGNA to Fidelity Investments. Concurrently, new investment options in Fidelity
managed funds were made available to plan participants. Existing balances in
CIGNA managed funds were transferred to the Fidelity Fund most closely matching
the stated investment strategy. The RMI Titanium Company Common Stock investment
option was retained.
6
<PAGE> 9
SCHEDULE I
FORM 5500
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS & INVESTMENT PLAN
<TABLE>
<CAPTION>
(e)
(b) (c) (d) CURRENT
(a) IDENTITY DESCRIPTION OF INVESTMENT COST VALUE
- ---- ---------------------------- ------------------------------------- ---------- ----------
<S> <C> <C> <C> <C>
- -- Fidelity Investments........ Fidelity Magellan Mutual Fund Acc't $2,968,119 $3,270,017
* Connecticut General Life
Insurance Company........... Guaranteed "Long-term" Account 3,425,458 3,425,458
* Connecticut General Life
Insurance Company........... Stock Market Index Account 300,700 343,352
* Connecticut General Life
Insurance Company........... Fidelity Advisor Income
and Growth Account 103,071 115,611
* Connecticut General Life
Insurance Company........... International Equity Account 402,983 469,416
* RMI Titanium Company........ RMI Titanium Company
Common Stock Account 225,707 471,950
- -- Participant Loans........... Interest Rates High 15.00%, Low 8.75% N/A 180,311
----------
TOTAL: $8,276,115
==========
</TABLE>
* DESIGNATED PARTY-IN-INTEREST
7
<PAGE> 10
SCHEDULE II
FORM 5500
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS
RMI TITANIUM COMPANY
EMPLOYEE SAVINGS & INVESTMENT PLAN
A. PURCHASES:
<TABLE>
<CAPTION>
IDENTITY OF DESCRIPTION NUMBER OF PURCHASED SELLING COST OF CURRENT NET GAIN
PARTY INVOLVED OF ASSETS TRANSACTIONS PRICE PRICE ASSET VALUE OR (LOSS)
- -------------------- --------------- ------------ ---------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Investments Fidelity 34 $1,066,639 N/A $1,066,639 $1,066,639 N/A
Magellan
Connecticut General Stock Market
Life Insurance Co. Index 33 291,664 N/A 291,664 291,664 N/A
Connecticut General Guaranteed
Life Insurance Co. "Long-Term" 44 733,381 N/A 733,381 733,381 N/A
RMI Titanium Company Common Stock 39 263,239 N/A 263,239 263,239 N/A
B. SALES:
Fidelity Investments Fidelity 48 N/A $684,590 644,436 684,590 $40,154
Magellan
Connecticut General Guaranteed
Life Insurance Co. "Long-Term" 56 N/A 463,905 463,905 463,905 N/A
Connecticut General Stock Market
Life Insurance Co. Index 7 N/A 60,957 53,873 60,957 7,084
RMI Titanium Company Common Stock 22 N/A 374,720 133,106 374,720 241,614
</TABLE>
8
<PAGE> 1
RMI TITANIUM COMPANY
BARGAINING UNIT EMPLOYEES SAVINGS
AND INVESTMENT PLAN
ANNUAL REPORT
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
EXHIBIT 99.2
<PAGE> 2
REPORT OF INDEPENDENT ACCOUNTANTS
May 30, 1997
To the Participants and Administrator
of RMI Titanium Company Bargaining Unit
Employees Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the RMI Titanium Company Bargaining Unit Employees Savings and
Investment Plan (the Plan) at December 31, 1996 and 1995, and the changes in net
assets available for benefits for the years then ended, in conformity with
generally accepted accounting principles. 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 generally accepted auditing
standards which 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 the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The additional information included
in Schedules I and II is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is additional
information required by the Employee Retirement Income Security Act of 1974. The
Fund Information in the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the changes in net assets available for benefits of each fund. Schedules I and
II and the Fund Information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
May 30, 1997
<PAGE> 3
RMI TITANIUM COMPANY
BARGAINING UNIT
EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Investments, at fair value:
Fidelity Magellan Mutual Fund................................... $ 5,029,544 $4,285,185
Fidelity Advisor Income and Growth Account...................... 75,456 35,222
CIGNA Stock Market Index Account................................ 186,766 51,162
CIGNA International Equity Account.............................. 136,512 82,282
RMI Titanium Company Common Stock Account....................... 1,185,574 307,740
Participant Loans Receivable.................................... 340,964 280,127
----------- ----------
6,954,816 5,041,718
Investments, at contract value:
Connecticut General Life Insurance Co. Guaranteed "Long-Term"
Account...................................................... 3,925,419 3,365,602
Net assets available for benefits............................... $10,880,235 $8,407,320
========== =========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
<PAGE> 4
RMI TITANIUM COMPANY
BARGAINING UNIT
EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
FIDELITY CIGNA
CIGNA FIDELITY ADVISOR STOCK CIGNA RMI
GUARANTEED MAGELLAN INCOME & MARKET INT'L. TITANIUM CO. PARTICIPANT
"LONG-TERM" MUTUAL FUND GROWTH INDEX EQUITY COMMON STOCK LOANS
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT RECEIVABLE TOTAL
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Employees'
contributions... $ 566,322 $ 549,387 $28,152 $ 25,266 $ 34,604 $ 50,430 $ -- $ 1,254,161
Investment income:
Interest and
dividend
income.......... 199,138 719,291 -- -- -- -- 26,700 945,129
Net appreciation
(depreciation)
in fair value of
investments..... -- (200,845) 5,276 23,107 9,882 830,375 -- 667,795
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
199,138 518,446 5,276 23,107 9,882 830,375 26,700 1,612,924
Transfers......... 40,583 (213,474) 6,806 88,350 9,744 1,858 34,137 (31,996)
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
Total net
additions..... 806,043 854,359 40,234 136,723 54,230 882,663 60,837 2,835,089
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
Participant's
benefits paid..... (246,226) (110,000) -- (1,119) -- (4,829) -- (362,174)
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
Total net
deductions.... (246,226) (110,000) -- (1,119) -- (4,829) -- (362,174)
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
Increase in net
assets............ 559,817 744,359 40,234 135,604 54,230 877,834 60,837 2,472,915
Net assets available
for benefits:
Beginning of
year............ 3,365,602 4,285,185 35,222 51,162 82,282 307,740 280,127 8,407,320
-------------- ------------ -------- -------- -------- ------------ ----------- -----------
End of year....... $3,925,419 $5,029,544 $75,456 $186,766 $136,512 $1,185,574 $ 340,964 $10,880,235
============= ============ ========= ======== ======== ============ ========== ==========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
<PAGE> 5
RMI TITANIUM COMPANY
BARGAINING UNIT
EMPLOYEES SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
FIDELITY CIGNA
CIGNA FIDELITY ADVISOR STOCK CIGNA RMI
GUARANTEED MAGELLAN INCOME & MARKET INT'L. TITANIUM CO. PARTICIPANT
"LONG-TERM" MUTUAL FUND GROWTH INDEX EQUITY COMMON STOCK LOANS
ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT ACCOUNT RECEIVABLE TOTAL
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Employees'
contributions... $ 553,957 $ 426,192 $17,793 $ 6,680 $ 22,502 $ 15,720 $ -- $1,042,844
Investment
income:
Interest and
dividend
income..... 179,535 245,061 -- -- -- -- 22,055 446,651
Net
appreciation
in fair
value of
investments... -- 870,436 6,361 13,425 9,479 90,296 -- 989,997
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
179,535 1,115,497 6,361 13,425 9,479 90,296 22,055 1,436,648
Transfers.... 101,400 (108,625) (35,402) (10,280) (52,145) 9,478 51,578 (43,996)
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Total net
additions
(deductions)... 834,892 1,433,064 (11,248) 9,825 (20,164) 115,494 73,633 2,435,496
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Participant's
benefits
paid......... (177,396) (221,702) -- (563) -- (1,006) (40,329) (440,996)
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Total net
deductions... (177,396) (221,702) -- (563) -- (1,006) (40,329) (440,996)
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
Increase
(decrease) in
net assets... 657,496 1,211,362 (11,248) 9,262 (20,164) 114,488 33,304 1,994,500
Net assets
available for
benefits:
Beginning of
year....... 2,708,106 3,073,823 46,470 41,900 102,446 193,252 246,823 6,412,820
-------------- ------------ -------- -------- -------- ------------ ----------- ----------
End of
year..... $3,365,602 $4,285,185 $35,222 $ 51,162 $ 82,282 $307,740 $ 280,127 $8,407,320
============ ============= ======== ======== ======== =========== ========= =========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
<PAGE> 6
RMI TITANIUM COMPANY
BARGAINING UNIT EMPLOYEES SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
NOTE 1--SUMMARY OF ACCOUNTING POLICIES:
ACCOUNTING METHOD
The financial statements of the RMI Titanium Company Bargaining Unit
Employees Savings and Investment Plan (the Plan) use the accrual method of
accounting.
USE OF ESTIMATES
Generally accepted accounting principles require management to make certain
estimates and assumptions relating primarily to the fair market value of certain
Plan assets. For additional information on the fair market value of Plan assets,
see "Investments" below.
INVESTMENTS
Available investment options are as follows:
Fidelity Magellan Mutual Fund Account (a mutual fund)
RMI Titanium Company Common Stock
Connecticut General Life Insurance Company Guaranteed "Long-Term"
Account (guaranteed investment contract)
Funds managed by CIGNA or Connecticut General Life Insurance Company, a
wholly-owned subsidiary of CIGNA:
Stock Market Index Account
Fidelity Advisor Income and Growth Account
International Equity Account
Investments in the Fidelity Magellan Mutual Fund and RMI Titanium Company
Common Stock are valued at fair market value based on published quotations. The
guaranteed investment contract is valued at contract value, which approximates
market value, and includes approximately $106,000 of assets as of December 31,
1996, which will be allocated in accordance with participants chosen investment
elections in effect at the time the funds were withheld. Security transactions
are recorded as of the settlement date. All CIGNA managed funds are valued by
CIGNA based on the published quotations of the underlying investments within
each of the funds and reflect current market value. Security transactions are
recorded as of the settlement date.
FUNDING
The Plan is funded by contributions from the 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 Plan Sponsor is RMI Titanium Company (the Company). The Company is a
successor to entities that have been operating in the titanium industry since
1958. The Company's operations are conducted primarily in one business segment,
the production and marketing of titanium metal and related products.
<PAGE> 7
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.
The Plan is a defined contribution plan covering full-time union
represented employees who are at least 21 years of age and have one year of
service. Effective July 1, 1996, eligibility was amended to at least 21 years of
age and three months of service. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
Participants may contribute from 1% to 15% of salary through payroll
deduction. Pretax contributions are subject to annual limitations as prescribed
by law ($9,500 in 1996). Contributions are directed by the participants into any
one or all of the investment options. Participants may change their elections of
investment funds by calling the recordkeeper directly or by completing a new
enrollment and change form and submitting it to the employee benefits department
at least 15 days in advance. 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 to the administrator for
withdrawal of all or a portion of their account balance for certain limited
situations qualifying as financial hardships under Internal Revenue Service
guidelines in effect at the time of withdrawal.
PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to 50% of the existing account balance. 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 account. Loans bear interest at a rate commensurate
with the current market rate when made. Loans made in 1996 bear interest at
8.75%. Interest rates on loans made prior to 1996 range from 8.75% 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.
TRANSFERS
Transfers represents net inter-plan and inter-fund transfers.
ADMINISTRATOR
The Plan's administrator is the Company's Retirement Board. The Board
establishes rules of procedures and interprets the provisions 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 with the amount in his/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.
<PAGE> 8
NOTE 3--INCOME TAXES:
The Internal Revenue Service (IRS) has determined and informed the Company
by a letter dated April 30, 1996, that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC). The
Plan administrator believes that the Plan is currently being operated in
compliance with the applicable requirements of the IRC. Therefore, no provision
for income taxes has been included in the Plan financial statements.
NOTE 4--RECORDKEEPING
Individual participant account balances, allocation and investment options
are maintained by CIGNA based on enrollment and payroll information supplied by
the Company.
NOTE 5--SUBSEQUENT EVENT
Effective February 1, 1997 the Company changed the Plan Recordkeeper from
CIGNA to Fidelity Investments. Concurrently, new investment options in Fidelity
managed funds were made available to plan participants. Existing balances in
CIGNA managed funds were transferred to the Fidelity Fund most closely matching
the stated investment strategy. The RMI Titanium Common Stock investment option
was retained.
<PAGE> 9
SCHEDULE I
FORM 5500
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
RMI TITANIUM COMPANY
BARGAINING UNIT EMPLOYEES SAVINGS & INVESTMENT PLAN
<TABLE>
<CAPTION>
(e)
(b) (c) (d) CURRENT
(a) IDENTITY DESCRIPTION OF INVESTMENT COST VALUE
- ---- --------------------------- ------------------------------------- ---------- -----------
<S> <C> <C> <C> <C>
- -- Fidelity Investments....... Fidelity Magellan Mutual Fund Acc't $4,601,651 $ 5,029,544
* Connecticut General Life
Insurance Company.......... Guaranteed "Long-term" Account 3,925,419 3,925,419
* Connecticut General Life
Insurance Company.......... Stock Market Index Account 154,911 186,766
* Connecticut General Life
Insurance Company.......... Fidelity Advisor Income and
Growth Account 68,002 75,456
* Connecticut General Life
Insurance Company.......... International Equity Account 118,746 136,512
* RMI Titanium Company....... RMI Titanium Company
Common Stock Account 318,115 1,185,574
- -- Participant Loans.......... Interest Rates High 15.00%, Low 8.5% N/A 340,964
-----------
TOTAL: $10,880,235
===========
</TABLE>
* DESIGNATED PARTY-IN-INTEREST
<PAGE> 10
SCHEDULE II
FORM 5500
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS
RMI TITANIUM COMPANY
BARGAINING UNIT EMPLOYEES SAVINGS & INVESTMENT PLAN
A. PURCHASES:
<TABLE>
<CAPTION>
IDENTITY OF DESCRIPTION NUMBER OF PURCHASED SELLING COST OF CURRENT NET GAIN
PARTY INVOLVED OF ASSETS TRANSACTIONS PRICE PRICE ASSET VALUE OR (LOSS)
- -------------------- --------------- ------------ ---------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Fidelity Investments Fidelity 32 $1,670,548 N/A $1,670,548 $1,670,548 N/A
Magellan
Connecticut General Guaranteed
Life Insurance Co. "Long-Term" 49 923,982 N/A 923,982 923,982 N/A
B. SALES:
Fidelity Investments Fidelity 67 N/A $528,779 $ 493,456 $ 528,779 $35,323
Magellan
Connecticut General Guaranteed
Life Insurance Co. "Long-Term" 68 N/A 576,030 576,030 576,030 N/A
</TABLE>
<PAGE> 11
SCHEDULE III
FORM 5500
ITEM 27B--SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
RMI TITANIUM COMPANY
BARGAINING UNIT EMPLOYEES SAVINGS & INVESTMENT PLAN
<TABLE>
<CAPTION>
AMOUNT RECEIVED
ORIGINAL DURING REPORTING YEAR UNPAID BALANCE DESCRIPTION AMOUNT OVERDUE
IDENTITY OF AMOUNT OF ----------------------------- AT END OF OF -----------------------------
OBLIGOR LOAN (D) PRINCIPAL (E) INTEREST YEAR LOAN (H) PRINCIPAL (I) INTEREST
- --------------------- ---------- ------------- ------------ -------------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Norman Chambers
Plan Participant $10,000.00 $ -0- $-0- $ 8,139.00 Participant $ 8,139.00 $-0-
loan @
15%
secured
by
participant's
account
balance
William E. Kowalczyk
Plan Participant $11,500.00 -0- -0- $10,910.09 Participant $ 10,910.09 -0-
loan @
15%
secured
by
participant's
account
balance
Joseph M. Migliozzi
Plan Participant $1,150.00 -0- -0- $ 1,110.56 Participant $ 1,110.56 -0-
loan @
15%
secured
by
participant's
account
balance
</TABLE>
