UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 4, 2004
TITANIUM METALS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-28538 13-5630895
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1999 Broadway, Ste. 4300, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 296-5600
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure.
The registrant hereby furnishes the information set forth in the speech
with an accompanying visual presentation delivered by Registrant's Chairman,
President and Chief Executive Officer to the 2004 Annual International Titanium
Association ("ITA") meeting, copies of which are attached hereto as Exhibits
99.1 and 99.2 and incorporated herein by reference.
The information, including the exhibit, the registrant furnishes in this
report is not deemed "filed" for purposes of section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section. Registration statements or other documents filed with the
Securities and Exchange Commission shall not incorporate this information by
reference, except as otherwise expressly stated in such filing.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Item No. Exhibit Index
99.1 Speech of Registrant's Chairman, President and
Chief Executive Officer delivered October 4, 2004.
99.2 Visual presentation of Registrant's Chairman,
President and Chief Executive Officer delivered October 4, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TITANIUM METALS CORPORATION
(Registrant)
/s/ Matthew O'Leary
Matthew O'Leary
Corporate Attorney and Assistant Secretary
Date: October 4, 2004
INDEX TO EXHIBITS
Exhibit No. Description
99.1 Speech of Registrant's Chairman, President and Chief Executive Officer
delivered October 4, 2004.
99.2 Visual presentation of Registrant's Chairman, President and Chief Executive
Officer delivered October 4, 2004.
EXHIBIT 99.1
SLIDE 1
GOOD MORNING.
I AM PLEASED TO BE HERE THIS MORNING TO ADDRESS YOU. I DO SO TODAY IN A MARKET
ENVIRONMENT WHICH HAS CHANGED SIGNIFICANTLY SINCE OUR MEETING LAST YEAR IN
MONTEREY. THE COMMERCIAL AEROSPACE AND INDUSTRIAL MARKETS FOR TITANIUM ARE BOTH
STRONGER THAN MOST OF US ANTICIPATED IN MONTEREY. TODAY I WANT TO EXPLORE WHY
THESE MARKETS IMPROVED SOONER THAN EXPECTED AND WHAT THAT MEANS FOR THE FUTURE.
SLIDE 2
FOR THOSE OF YOU FAMILIAR WITH REGULATED PUBLIC COMPANIES IN THE UNITED STATES,
YOU KNOW THAT WE QUALIFY ALL OF OUR PROJECTIONS OR FORWARD LOOKING STATEMENTS
WITH A NUMBER OF FACTORS, WHICH MAY CAUSE ACTUAL RESULTS TO DIFFER FROM THE
FORWARD LOOKING STATEMENTS. RATHER THAN LIST THEM ALL TODAY, I WOULD REFER YOU
TO TIMET'S PUBLIC SEC FILINGS, WHICH GO INTO CONSIDERABLE DETAIL.
FOR THOSE OF YOU NOT FAMILIAR WITH U.S. SECURITIES LAWS AND REGULATIONS YOU
MIGHT THINK IT UNNECESSARY TO QUALIFY PROJECTIONS BECAUSE YOU ALREADY KNOW THEY
ARE RARELY PRECISE. NEVERTHELESS, WE HAVE TO LIVE WITH THE SYSTEM WE HAVE.
SLIDE 3
I PLAN TO FOCUS MY SPEECH ON WHAT HAS HAPPENED SINCE THE MONTEREY, CALIFORNIA
MEETING A YEAR AGO. FIRST I WILL LOOK AT GLOBAL ECONOMIC TRENDS. SECOND, I WILL
REVIEW TRENDS AFFECTING THE COMMERCIAL AEROSPACE MARKET. AND FINALLY, TRENDS
IMPACTING INDUSTRIAL AND CONSUMER MARKETS. INCLUDED IN THE LATTER TWO ITEMS WILL
BE OUR PROJECTIONS OF FUTURE TITANIUM CONSUMPTION.
SLIDE 4
AT THE MEETING IN MONTEREY LAST OCTOBER WE WERE LOOKING BACK AT AN ANEMIC
OVERALL U.S. ECONOMY. WE SAW A VIRTUAL NO-GROWTH ECONOMY FOR 2001, ONLY 1.9%
GROWTH IN 2002, AND THE REPORTED NUMBERS FOR THE FIRST HALF OF 2003 SHOWED
GROWTH AT ONLY 1.1% AS COMPARED TO THE SECOND HALF OF 2002. THE SECOND QUARTER
2003 GDP GROWTH WAS ENCOURAGING BUT WAS AN OUTLIER WHEN LOOKING BACK 2 1/2
YEARS.
SLIDE 5
IN EUROPE AND JAPAN WE SAW A SIMILAR TREND, WITH LIMITED GROWTH. BOTH EUROPE'S
AND JAPAN'S GROWTH ACTUALLY SLOWED FROM 1.6% IN 2001 TO 0.8% IN 2002 FOR EUROPE
AND 0.4% IN 2001 AND -0.3% IN 2002 FOR JAPAN. AND THE FIRST HALF OF 2003 SHOWED
LITTLE IMPROVEMENT. ASIAN ECONOMIES WERE STRONGER BUT WERE ALSO SUFFERING FROM
9/11 AND SARS.
SLIDE 6
THIS SLIDE SHOWS WHAT WE HAVE LEARNED ABOUT THE ECONOMY SINCE MONTEREY. AS SHOWN
BY THE BARS ON THE RIGHT IN GOLD, IN THE FOUR QUARTERS FOLLOWING OUR LAST
MEETING, U.S. GDP GREW AT A RATE OF 4.4%, A SIGNIFICANT IMPROVEMENT OVER THE
EARLIER 2 1/2 YEAR PERIOD.
SLIDE 7
AS YOU CAN SEE FROM THE BLACK STRIPED BARS ON THE RIGHT, THE EUROPEAN ECONOMY
HAS SHOWN MODERATE IMPROVEMENT SINCE MID 2003, AND THE JAPANESE ECONOMY HAS
IMPROVED MARKEDLY - IF NOT ROBUSTLY IN THAT SAME PERIOD, AS CAN BE SEEN BY THE
RED STRIPED BARS.
THIS STRONG OVERALL IMPROVEMENT IN GLOBAL ECONOMIES PROVIDES A BACK DROP FOR
EXAMINING THE COMMERCIAL AEROSPACE AND INDUSTRIAL/CONSUMER SECTORS OF THE
TITANIUM INDUSTRY.
SLIDE 8
LET'S LOOK AT COMMERCIAL AEROSPACE FIRST.
IN MONTEREY, THE OUTLOOK FOR THE WORLD'S AIRLINES, PARTICULARLY THE MAJOR U.S.
AIRLINES, WAS SHOWING FEW SIGNS OF IMPROVING. WORLDWIDE AIRLINE TRAFFIC,
MEASURED IN REVENUE PASSENGER MILES (RPM'S), WAS NOT VERY ENCOURAGING.
THROUGHOUT MOST OF THE WORLD, RPM'S REMAINED BELOW THE PRE SEPTEMBER 11, 2001
LEVELS AND U.S. MAJOR AIRLINES HAD INCURRED MASSIVE LOSSES IN 2002 AND 2003.
THEY WERE STARING AT NEARLY $3 BILLION IN ANTICIPATED LOSSES FOR 2004.
ADDITIONALLY, BOEING AND AIRBUS WERE EXPECTING DELIVERIES IN 2004 TO REMAIN FLAT
COMPARED TO THE 2003 LEVEL. THE AIRBUS 380 WAS IN ITS EARLY DEVELOPMENTAL PHASE
AND THE 7E7 WAS STILL A CONCEPT.
AIRLINE MONITOR'S JULY 2003 DELIVERY FORECAST (SHOWN HERE IN RED), WHICH WAS THE
MOST CURRENT AIRLINE MONITOR FORECAST AT THE TIME OF LAST YEAR'S MEETING,
SIGNIFICANTLY AND NEGATIVELY RESTATED ITS JANUARY 2003 FORECAST (SHOWN HERE IN
GREEN) BY SHOWING A DECLINING DELIVERY SCHEDULE THROUGH 2005 VERSUS ITS EARLIER
PREDICTION OF A FLAT MARKET THROUGH THIS PERIOD.
SLIDE 9
NOW LET'S LOOK AT WHAT'S DIFFERENT. FIRST, U.S. AIRLINE RPM'S FINALLY SURPASSED
THE PRE-SEPTEMBER 2001 LEVEL IN JULY OF THIS YEAR. WORLDWIDE RPMS
FOR JULY 2004 SUBSTANTIALLY EXCEEDED EARLIER PERIODS FOR THE LAST FOUR YEARS,
OVERCOMING 9/11 AND SARS ISSUES.
SECOND, WHILE THE U.S. MAJOR AIRLINES ARE NOT EXPECTED TO BE PROFITABLE UNTIL
2005, AND WE READ EVERY DAY ABOUT THE BANKRUPTCIES OR NEAR BANKRUPTCY OF UNITED
AIRLINES, U.S. AIRWAYS AND DELTA AIRLINES, IF WE LOOK AT THE NUMBERS CAREFULLY
WE SEE THAT AN IMPORTANT TREND HAS EMERGED IN THE LAST 18 MONTHS. THE "LOW-COST
AIRLINES" LIKE JET BLUE, RYAN AIR, FRONTIER AND AIRTRAN HAVE NOT ONLY BEEN
GROWING RAPIDLY, BUT MOST HAVE BEEN PROFITABLE DURING THE LAST THREE YEARS.
THESE AIRLINES IN THE U.S. AND OTHER "LOW-COST AIRLINES" IN EUROPE AND ASIA HAVE
CHOSEN A STRATEGY OF BUYING NEW AIRCRAFT TO GET STARTED AND EXPANDING THEIR
ROUTES RAPIDLY, WHICH FURTHER INCREASES THE NEED FOR NEW AIRCRAFT. LOW CAPITAL
COSTS AND GREATER OPERATING EFFICIENCIES DRIVE THIS STRATEGY.
SLIDE 10
AS THIS CHART SHOWS, THE "LOW COST AIRLINES" GROWTH IN TRAFFIC (SHOWN IN GREEN)
SUBSTANTIALLY EXCEEDS THAT OF THE MAJORS (SHOWN IN BLUE). IF SOUTHWEST (AN
ESTABLISHED "LOW COST AIRLINE") IS TAKEN OUT OF THE GREEN BARS, TRAFFIC GROWTH
RATES OF LOW COST AIRLINES WOULD BE EVEN GREATER.
THIRD, LOOKING AT THE MAJOR AIRFRAME MANUFACTURERS, BOEING AND AIRBUS ARE
PROJECTING HIGHER AIRCRAFT DELIVERIES FOR 2004 AND 2005. THE AIRBUS 380 HAS A
STRONG ORDER BOOK AND IS IN THE EARLY STAGES OF PRODUCTION. BOEING IS FULLY
COMMITTED TO THE 7E7 AND HAS STRONG INITIAL ORDERS. THE BEST INDICATION OF THE
SUCCESS OF THE 7E7 IS THAT AIRBUS HAS ANNOUNCED IT MAY BUILD A VERSION OF THE
A330 TO COMPETE WITH THE 7E7.
SLIDE 11
FINALLY, PERHAPS THE MOST DRAMATIC CHANGE IN OUTLOOK CAME FROM AIRLINE MONITOR.
THIS GRAPH SHOWS THEIR JULY 2003 PREDICTIONS IN RED (WHICH IS WHAT WE HAD IN
MONTEREY), THEIR JANUARY 2004 INCREASE IN BLUE AND THEIR LATEST FORECAST, JULY
2004, IN BLACK. WHILE PART OF THIS CHANGED FORECAST IS SIMPLY KEEPING UP WITH
NEAR TERM ANNOUNCEMENTS BY BOEING AND AIRBUS, IT ALSO REFLECTS A LONGER TERM
VIEW THAT THE MARKET WILL CONTINUE TO GROW UNTIL 2008 AND ONLY THEN TAIL OFF
SOMEWHAT THROUGH 2010.
NOW WE ALL KNOW THAT WHATEVER HAPPENS THROUGH 2010 WILL BE DIFFERENT FROM WHAT
WE SEE PROJECTED HERE. HOWEVER, DIRECTIONALLY, COMMERCIAL AEROSPACE IS SHOWING
STRENGTH.
SLIDE 12
HOW DOES THIS TRANSLATE INTO TITANIUM CONSUMPTION? AS WE KNOW, IT HAS A VERY
DIRECT CORRELATION. HERE WE SHOW IN BLUE ACTUAL CONSUMPTION FROM '96 THROUGH
2003 AND ESTIMATED CONSUMPTION THROUGH 2008 IN GOLD.
WE ARE SUGGESTING THAT 2004 CONSUMPTION WILL BE 127% OF THE AVERAGE OF 2002 AND
2003 LEVELS AND SLIGHTLY HIGHER THAN 2000 LEVELS. 2005 CONSUMPTION IS ESTIMATED
TO BE NEAR THE 2001 AND 1997 PEAKS. 2006 IS SHOWN HERE TO BE A RECORD YEAR OF
CONSUMPTION, EXCEEDING THE 1997 PEAK BY 6%.
ANOTHER WAY TO LOOK AT THIS IS TO SEE THAT WHEN WE LOOK OUT TO THE NEXT
PROJECTED PEAK IN 2007, INDUSTRY SHIPMENTS INTO THE COMMERCIAL AEROSPACE SECTOR
MAY NEARLY DOUBLE TO 29,000 METRIC TONS FROM A LOW OF 16,000 METRIC TONS IN
2003.
SLIDE 13
THE CHANGES IN THE INDUSTRIAL MARKET SINCE OUR MEETING IN MONTEREY HAVE BEEN
LESS DRAMATIC THAN COMMERCIAL AEROSPACE BUT STILL SIGNIFICANT. POWER GENERATION
HAS MADE A COMEBACK PRIMARILY BECAUSE OF THE CHINESE ECONOMY. GREATER NUMBERS OF
PROJECTS IN DESALINATION, THE CHEMICAL PROCESS INDUSTRY AND HEAT TRANSFER HAVE
COME OFF THE DRAWING BOARDS IN THE LAST 8 - 10 MONTHS, CREATING A SIGNIFICANT
UPTURN IN DEMAND FOR THE INDUSTRIAL SECTOR. WHEN WE ADD IN ESTABLISHED CONSUMER
APPLICATIONS SUCH AS EYEGLASSES, JEWELRY, SPORTING GOODS SUCH AS GOLF CLUBS, AND
MEDICAL APPLICATIONS SUCH AS IMPLANTS AND ARTIFICIAL JOINTS TO THE "INDUSTRIAL"
CATEGORIZATION, WE HAVE A SECTOR OF THE TITANIUM INDUSTRY THAT WAS ABOUT 28,000
MT IN 2003 IN TERMS OF MILL PRODUCT SHIPMENTS.
SLIDE 14
LOOKING AHEAD, WE SEE GROWING TITANIUM INDUSTRIAL APPLICATIONS THAT WILL GIVE
STEADY GROWTH TO OVER 32,000 MT BY 2008. WE EXPECT THAT THE CHANGES IN VOLUMES
FOR THE INDUSTRIAL SECTOR WILL BE LESS CYCLICAL THAN THE COMMERCIAL AEROSPACE
SECTOR BUT THAT BOTH SECTORS WILL SHOW GROWTH THROUGH 2008.
SLIDE 15
WHILE OTHER PRESENTERS ARE GOING TO FOCUS ON OVERALL PRODUCTION ESTIMATES FOR
THE INDUSTRY, I THOUGHT I WOULD THROW OUT AN ESTIMATE FROM TIMET'S POINT OF
VIEW. IN ADDITION TO THE INCREASE IN INDUSTRIAL/CONSUMER MARKETS, AS YOU WILL
HEAR [HAVE HEARD] WE HAVE SEEN A STRONG INCREASE IN MILITARY AEROSPACE
APPLICATIONS AND EMERGING MARKETS SUCH AS ARCHITECTURE, AUTOMOTIVE, OIL AND GAS
AND THE ARMOR/ARMAMENT MARKETS.
THIS SLIDE SHOWS ESTIMATED WORLDWIDE MILL PRODUCT TITANIUM SHIPMENTS TOTALING
OVER 56,000 MT IN 2004, ESSENTIALLY EQUIVALENT TO THE LEVEL OF SHIPMENTS IN 1998
AND MOVING UPWARD TOWARD THE 61,000 METRIC TONS SHIPPED IN 1997 (THE PEAK YEAR
IN THE INDUSTRY). PLEASE NOTE THAT AEROSPACE HERE INCLUDES MILITARY AEROSPACE.
SLIDE 16
THIS SLIDE SHOWS SIMILAR SHIPMENT ESTIMATES BY REGION, BUT IT ALSO TAKES INTO
CONSIDERATION MELTED PRODUCT SHIPMENTS. AS YOU CAN SEE, 2004 ESTIMATES PROVIDE
FOR APPROXIMATELY 66,000 METRIC TONS, WHICH IS THE HIGHEST POINT SINCE BEFORE
1998.
IN CONCLUSION, THE OLD ADAGE "THE MORE THINGS CHANGE, THE MORE THINGS LOOK THE
SAME" COMES TO MIND AS WE LOOK AT THESE STATISTICS. LAST YEAR WE WERE
FORECASTING THAT THE COMMERCIAL AEROSPACE MARKET WOULD STABILIZE AND REMAIN AT
LOW LEVELS THROUGH AT LEAST 2005. IT'S QUITE A DIFFERENT PICTURE TODAY. WE WERE
PROBABLY OFF BY 12-18 MONTHS IN THE COMMERCIAL AEROSPACE MARKET. WE ALSO
PROBABLY UNDERESTIMATED GROWTH IN INDUSTRIAL SECTORS (AT LEAST THOSE OF US IN
THE U.S. INDUSTRY). THE STRENGTH OF MILITARY APPLICATIONS HAS BEEN LIFTED BY
INTERNATIONAL EVENTS NOT FULLY UNDERSTOOD A YEAR AGO.
AS DIFFICULT AS THE LAST FEW YEARS HAVE BEEN FOR OUR INDUSTRY, MUCH OF WHAT WE
DID DURING THIS DOWNTURN, IMPROVING OUR MANUFACTURING EFFICIENCY, IMPROVING
YIELDS, REDUCING COSTS GENERALLY AND CONTINUOUS INVESTMENT IN NEW EMERGING
MARKETS WILL SERVE US AND OUR CUSTOMERS IN THIS IMPROVED MARKET ENVIRONMENT.
THANK YOU.
EXHIBIT 99.2
TIMET Logo
The Titanium Industry:
Commercial Aerospace and Industrial Markets Overview
Mr. J. Landis Martin
October 2004
Disclaimer
This presentation contains forward-looking statements and actual results may
differ materially from results anticipated in the forward-looking statements.
These anticipated results and additional risk factors are described from time to
time in the Company's filings with the Securities and Exchange Commission,
including its report on Form 10-K for the year ending December 31, 2003 and its
quarterly reports on Form 10-Q.
Topics for Discussion
Global economic trends
Commercial aerospace markets
Industrial and consumer markets
Economics
U.S. Quarterly GDP - 2001 through Q2 2003 Percent Change from Previous Quarter
[graph]
Source: U.s. Department of Commerce, Bureau of Economic Analysis, September 2004
Economics
Europe/Japan GDP - 2001 through Q2 2003
Percent Change from Previous Year or Quarter
[graph]
Source: Dresdner Bank, Economy & Markets, September 2004 and December 2003
Economics
U.S. Quarterly GDP - 2001 through Q2 2004 Percent Change from Previous Quarter
[graph]
Source: U.s. Department of Commerce, Bureau of Economic Analysis, September 2004
Economics
Europe/Japan GDP - 2001 through Q2 2004
Percent Change from Previous Year or Quarter
[graph]
Source: Dresdner Bank, Economy & Markets, September 2004 and December 2003
Commercial Aerospace
Large Commercial Aircraft Delivery Forecast
[graph]
Source: The Airline Monitor, January/February 2003 and July 2003
Large Commercial Aircraft include Boeing and Airbus aircraft with specified
seating capacity of 100 or more.
Commercial Aerospace
July Traffic
[graph] Source: ROM Associates
Commercial Aerospace
2004 Traffic Comparison
U.S. Low-Cost v. Legacy Airlines
[graph]
Source: Monthly Traffic Results Press Releases
Low-Cost Airlines include JetBlue, AirTran, Southwest and Frontier Airlines.
Legacy Carries include American, United, Delta,
Northwest, Continental and US Airways
Commercial Aerospace
Large Commercial Aircraft Delivery Forecast
[graph]
Source: The Airline Monitor, July 2004, January/February 2004, July 2003
Large Commercial Aircraft include Boeing and Airbus aircraft with specified
seating capacity of 100 or more.
Commercial Aerospace
Titanium Industry Mill Product Shipments
Commercial Aerospace
[graph]
Source: JTS Statistics, Public documents ad TIMET internal estimates based on
the July 2004 The Airline Monitor forecast
Industrial
Increase in "Industrial" demand in 2004 v. 2002:
Power Generation
Desalination
Chemical Process
Heat transfer
Electrochemical
Consumer
Sporting Goods
Medical
Industrial
Titanium Industry Mill Product Shipments
Industrial/Consumer
[graph]
Source: JTS Statistics, Public documents and TIMET internal estimates
By Industry Consuming Sector
Titanium Industry Mill Product Shipments
[graph]
Emerging Markets: Architecture, Automotive, Oil & Gas, Armor/Armament
Source: JTS Statistics, U.S. Bureau of Mines and TIMET internal estimates
By Region
Titanium Industry Mill & Melted Product Shipments
[graph]
Source: JTS Statistics, Public documents, ITA database, CTS Statistics and TIMET
internal estimates
[picture]
Thank you!