SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

 X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934


                  For the quarterly period ended June 30, 2005
                                                 -------------

                                       OR

     TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF THE  SECURITIES
---  EXCHANGE ACT OF 1934

                         Commission file number 0-28538
                                                -------


                           Titanium Metals Corporation
            --------------------------------------------------------
             (Exact name of registrant as specified in its charter)



           Delaware                                              13-5630895
--------------------------------                           ---------------------
(State or other jurisdiction of                               (IRS Employer
incorporation or organization)                              Identification No.)



                1999 Broadway, Suite 4300, Denver, Colorado 80202
              -----------------------------------------------------
               (Address of principal executive offices) (Zip Code)



       Registrant's telephone number, including area code: (303) 296-5600
                                                           --------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months,  and (2) has been subject to such filing  requirements
for the past 90 days.

                               Yes   X     No
                                    ---        ---


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                               Yes   X     No
                                    ---        ---


Number of shares of common stock outstanding on July 29, 2005: 16,096,224

<PAGE>












Forward-Looking Information

     The statements  contained in this Quarterly Report on Form 10-Q ("Quarterly
Report")  that  are  not  historical  facts,  including,  but  not  limited  to,
statements  found  in the  Notes to  Consolidated  Financial  Statements  and in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations ("MD&A"), are forward-looking  statements that represent management's
beliefs   and   assumptions   based   on   currently   available    information.
Forward-looking  statements can generally be identified by the use of words such
as  "believes,"   "intends,"   "may,"  "will,"   "looks,"   "should,"   "could,"
"anticipates,"   "expects"  or  comparable  terminology  or  by  discussions  of
strategies  or trends.  Although  the  Company  believes  that the  expectations
reflected in such forward-looking  statements are reasonable, it cannot give any
assurance that these  expectations will prove to be correct.  Such statements by
their  nature   involve   substantial   risks  and   uncertainties   that  could
significantly  affect  expected  results.  Actual  future  results  could differ
materially  from those  described in such  forward-looking  statements,  and the
Company   disclaims  any  intention  or  obligation  to  update  or  revise  any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise. Among the factors that could cause actual results to differ
materially are the risks and  uncertainties  discussed in this Quarterly Report,
including risks and  uncertainties in those portions  referenced above and those
described  from time to time in the Company's  other filings with the Securities
and  Exchange  Commission  ("SEC")  which  include,  but are not limited to, the
cyclicality of the commercial  aerospace industry,  the performance of aerospace
manufacturers and the Company under their long-term  agreements,  the renewal of
certain long-term agreements,  the difficulty in forecasting demand for titanium
products,  global economic and political conditions,  global productive capacity
for  titanium,  changes in product  pricing and costs,  the impact of  long-term
contracts  with  vendors  on the  ability of the  Company to reduce or  increase
supply  or  achieve  lower  costs,   the   possibility  of  labor   disruptions,
fluctuations  in currency  exchange  rates,  fluctuations in the market price of
marketable securities, control by certain stockholders and possible conflicts of
interest,   uncertainties   associated   with  new  product   development,   the
availability  of raw materials and services,  changes in raw material prices and
other operating costs (including energy costs),  possible disruption of business
or increases in the cost of doing business  resulting from terrorist  activities
or global  conflicts,  the  potential for  adjustment of the Company's  deferred
income tax asset valuation  allowance and other risks and uncertainties.  Should
one  or  more  of  these  risks  materialize  (or  the  consequences  of  such a
development  worsen),  or should the  underlying  assumptions  prove  incorrect,
actual results could differ materially from those forecasted or expected.



<PAGE>




                           TITANIUM METALS CORPORATION

                                      INDEX


                                                                           Page
                                                                          Number

PART I. FINANCIAL INFORMATION

     Item 1. Consolidated Financial Statements

             Consolidated Balance Sheets - June 30, 2005 (unaudited)
               and December 31, 2004                                          2

             Consolidated Statements of Operations - Three and six months
               ended June 30, 2005 and 2004 (unaudited)                       4

             Consolidated Statements of Comprehensive Income (Loss) -
               Three and six months ended June 30, 2005 and 2004 (unaudited)  5

             Consolidated Statements of Cash Flows - Six months ended
               June 30, 2005 and 2004 (unaudited)                             6

             Consolidated Statement of Changes in Stockholders' Equity -
               Six months ended June 30, 2005 (unaudited)                     8

             Notes to Consolidated Financial Statements (unaudited)           9

     Item 2. Management's Discussion and Analysis of Financial
               Condition and Results of Operations                           22

     Item 3. Quantitative and Qualitative Disclosures About Market Risk      33

     Item 4. Controls and Procedures                                         33

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings                                               35

     Item 4. Submission of Matters to a Vote of Security Holders             35

     Item 6. Exhibits                                                        36

                                      - 1 -

<PAGE>

                           TITANIUM METALS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)
<TABLE>

                                                                                 June 30,               December 31,
ASSETS                                                                             2005                    2004
                                                                            --------------------    --------------------
                                                                                (unaudited)             (as restated,
                                                                                                         see Note 1)
<S>                                                                         <C>                     <C>
Current assets:
   Cash and cash equivalents                                                $           4,938       $           7,194
   Restricted cash and cash equivalents                                                   146                     721
   Accounts and other receivables, less
     allowance of $1,479 and $1,683, respectively                                     130,023                  96,756
   Inventories                                                                        305,261                 258,324
   Prepaid expenses and other                                                           3,163                   2,400
   Deferred income taxes                                                                2,138                   4,974
                                                                            --------------------    --------------------

       Total current assets                                                           445,669                 370,369

Marketable securities                                                                  49,328                  47,214
Investment in joint ventures                                                           24,119                  22,591
Investment in common securities of TIMET Capital Trust I                                6,259                   6,259
Property and equipment, net                                                           242,048                 228,173
Intangible assets, net                                                                  4,529                   5,057
Deferred income taxes                                                                  22,375                   1,053
Other                                                                                  10,967                  11,577
                                                                            --------------------    --------------------

       Total assets                                                         $         805,294       $         692,293
                                                                            ====================    ====================
</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 2 -


<PAGE>


                           TITANIUM METALS CORPORATION

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      (In thousands, except per share data)

<TABLE>
                                                                                  June 30,             December 31,
LIABILITIES, MINORITY INTEREST AND                                                  2005                   2004
STOCKHOLDERS' EQUITY                                                         -------------------    --------------------
                                                                                (unaudited)            (as restated,
                                                                                                        see Note 1)

<S>                                                                          <C>                    <C>
Current liabilities:
   Notes payable                                                             $          66,672      $          43,176
   Accounts payable                                                                     60,878                 44,164
   Accrued liabilities                                                                  50,136                 53,130
   Deferred gain on sale of property                                                         -                 12,016
   Customer advances                                                                    29,971                  6,913
   Income taxes payable                                                                  7,272                  2,516
   Other                                                                                   462                    257
                                                                             -------------------    --------------------

       Total current liabilities                                                       215,391                162,172

Accrued OPEB cost                                                                       14,704                 14,470
Accrued pension cost                                                                    73,387                 77,515
Accrued environmental cost                                                               1,948                  1,985
Deferred income taxes                                                                       57                     60
Debt payable to TIMET Capital Trust I                                                   12,010                 12,010
Other                                                                                    4,901                  5,114
                                                                             -------------------    --------------------

       Total liabilities                                                               322,398                273,326
                                                                             -------------------    --------------------

Minority interest                                                                       11,019                 12,539
                                                                             -------------------    --------------------

Stockholders' equity:

   Series A Preferred Stock, $.01 par value; $195,455
     liquidation preference; 4,025 shares authorized,
     3,909 shares issued                                                               173,650                173,650
   Common stock, $.01 par value; 90,000 shares authorized,
     16,042 and 15,963 shares issued, respectively                                         160                    160
   Additional paid-in capital                                                          352,762                350,866
   Accumulated deficit                                                                  (5,337)               (77,044)
   Accumulated other comprehensive loss                                                (48,150)               (39,989)
   Treasury stock, at cost  (45 shares)                                                 (1,208)                (1,208)
   Deferred compensation                                                                     -                     (7)
                                                                             -------------------    --------------------

       Total stockholders' equity                                                      471,877                406,428
                                                                             -------------------    --------------------

       Total liabilities, minority interest and
        stockholders' equity                                                 $         805,294      $         692,293
                                                                             ===================    ====================

Commitments and contingencies (Note 12)

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 3 -

<PAGE>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                      (In thousands, except per share data)

<TABLE>

                                                                 Three months ended                     Six months ended
                                                                      June 30,                              June 30,
                                                          ----------------------------------    ----------------------------------
                                                               2005               2004               2005               2004
                                                          ---------------    ---------------    ---------------    ---------------
                                                                              (as restated,                         (as restated,
                                                                               see Note 1)                           see Note 1)

<S>                                                       <C>                <C>                <C>                <C>
Net sales                                                 $      183,746     $     124,125      $      338,981     $      244,613
Cost of sales                                                    135,866           107,119             262,146            214,822
                                                          ---------------    ---------------    ---------------    ---------------

   Gross margin                                                   47,880            17,006              76,835             29,791

Selling, general, administrative and
   development expense                                            12,978            11,151              25,339             20,668
Equity in earnings (losses) of joint ventures                      1,344              (149)              2,145               (232)
Other income (expense), net                                          690             2,778               2,676              2,853
                                                          ---------------    ---------------    ---------------    ---------------

   Operating income                                               36,936             8,484              56,317             11,744

Interest expense                                                     943             4,088               1,617              8,398
Other non-operating income (expense), net                         15,426               159              16,169                897
                                                          ---------------    ---------------    ---------------    ---------------

Income before income taxes and
   minority interest                                              51,419             4,555              70,869              4,243

Income tax expense (benefit)                                      13,339               799              (9,540)             1,321
Minority interest, net of tax                                      1,181               371               2,105                761
                                                          ---------------    ---------------    ---------------    ---------------

   Net income                                                     36,899             3,385              78,304              2,161

Dividends on Series A Preferred Stock                              3,298                 -               6,597                  -
                                                          ---------------    ---------------    ---------------    ---------------

   Net income attributable to
     common stockholders                                  $       33,601     $       3,385      $       71,707     $        2,161
                                                          ===============    ===============    ===============    ===============

Earnings (loss) per share attributable to
   common stockholders:
     Basic                                                $         2.10     $        0.21      $         4.49     $         0.14
     Diluted                                              $         1.63     $        0.21      $         3.47     $         0.14

Weighted average shares outstanding:
     Basic                                                        15,993            15,879              15,961             15,871
     Diluted                                                      22,659            15,935              22,629             15,915

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 4 -


<PAGE>



                           TITANIUM METALS CORPORATION

       CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

                                 (In thousands)

<TABLE>

                                                                 Three months ended                     Six months ended
                                                                      June 30,                              June 30,
                                                          ----------------------------------    ----------------------------------
                                                               2005               2004               2005               2004
                                                          ---------------    ---------------    ---------------    ---------------
                                                                              (as restated,                         (as restated,
                                                                               see Note 1)                           see Note 1)

<S>                                                       <C>                <C>                <C>                <C>
Net income                                                $       36,899     $       3,385      $       78,304     $        2,161
                                                          ---------------    ---------------    ---------------    ---------------

Other comprehensive income (loss):

   Currency translation adjustment                                (6,814)           (1,634)             (8,110)               (18)

   Unrealized gains (losses) on marketable
     securities, net of taxes                                         10             2,135                (167)             6,585

   TIMET's share of VALTIMET SAS's
     unrealized net (losses) gains on
     derivative financial instruments
     qualifying as cash flow hedges                                 (636)             (304)                116                (54)
                                                          ---------------    ---------------    ---------------    ---------------

     Total other comprehensive (loss) income                      (7,440)              197              (8,161)             6,513
                                                          ---------------    ---------------    ---------------    ---------------

   Comprehensive income                                   $       29,459     $       3,582      $       70,143     $        8,674
                                                          ===============    ===============    ===============    ===============

</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                      - 5 -


<PAGE>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                 (In thousands)
<TABLE>
                                                                                     Six months ended June 30,
                                                                              ----------------------------------------
                                                                                     2005                 2004
                                                                              -------------------   ------------------
                                                                                                       (as restated,
                                                                                                        see Note 1)
<S>                                                                           <C>                   <C>
Cash flows from operating activities:
   Net income                                                                 $        78,304       $         2,161
   Depreciation and amortization                                                       15,767                16,385
   (Gain) loss on disposal of fixed assets                                            (13,655)                   28
   Noncash impairment of equipment                                                      1,251                     -
   Equity in (earnings) losses of joint ventures, net
     of distributions                                                                  (2,145)                  232
   Equity in earnings of common securities of TIMET
     Capital Trust I, net of distributions                                                  -                   536
   Deferred income taxes                                                              (18,473)                  (96)
   Minority interest, net of tax                                                        2,105                   761
   Other, net                                                                             (50)                  (30)
   Change in assets and liabilities:
     Receivables                                                                      (37,660)              (16,860)
     Inventories                                                                      (53,789)              (23,528)
     Prepaid expenses and other                                                        (1,006)                  884
     Accounts payable and accrued liabilities                                          17,385                 7,543
     Customer advances                                                                 23,425                23,957
     Income taxes                                                                       5,190                 2,814
     Accrued OPEB and pension costs                                                       408                 2,260
     Accrued interest on debt payable to TIMET Capital Trust I                              -               (17,857)
     Other, net                                                                           843                (1,328)
                                                                              -------------------   ------------------
       Net cash provided (used) by operating activities                                17,900                (2,138)
                                                                              -------------------   ------------------

Cash flows from investing activities:
   Capital expenditures                                                               (34,888)               (6,714)
   Purchase of marketable securities                                                   (2,223)              (16,533)
   Change in restricted cash, net                                                         576                     -
   Proceeds from the sale of property                                                   1,289                     -
                                                                              -------------------   ------------------
       Net cash used by investing activities                                          (35,246)              (23,247)
                                                                              -------------------   ------------------

Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                                       155,161                21,070
     Repayments                                                                      (131,666)              (20,070)
   Dividends paid on Series A Preferred Stock                                          (6,597)                    -
   Dividend paid to minority shareholder                                               (2,216)                 (691)
   Other, net                                                                           1,096                  (446)
                                                                              -------------------   ------------------
       Net cash provided (used) by financing activities                                15,778                  (137)
                                                                              -------------------   ------------------

       Net cash used by operating, investing and
         financing activities                                                 $        (1,568)      $       (25,522)
                                                                              ===================   ==================

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 6 -
<PAGE>


                           TITANIUM METALS CORPORATION

          CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)

                                 (In thousands)

<TABLE>
                                                                                     Six months ended June 30,
                                                                              ----------------------------------------
                                                                                    2005                  2004
                                                                              ------------------    ------------------
                                                                                                       (as restated,
                                                                                                        see Note 1)
<S>                                                                           <C>                   <C>
Cash and cash equivalents:
   Net decrease from:
     Operating, investing and financing activities                            $        (1,568)      $      (25,522)
     Effect of exchange rate changes on cash                                             (688)                (302)
                                                                              ------------------    ------------------
                                                                                       (2,256)             (25,824)
   Cash and cash equivalents at beginning of period                                     7,194               35,040
                                                                              ------------------    ------------------

   Cash and cash equivalents at end of period                                 $         4,938       $        9,216
                                                                              ==================    ==================

Supplemental disclosures:
   Cash paid for:
     Interest                                                                 $         1,228       $       25,860
     Income taxes, net                                                        $         3,737       $            -

</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                      - 7 -
<PAGE>

                           TITANIUM METALS CORPORATION

      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

                         Six months ended June 30, 2005
                                 (In thousands)

<TABLE>
                                                                                         Accumulated
                                                       Series A   Additional                Other
                                    Common   Common    Preferred   Paid-in   Accumulated Comprehensive Treasury Deferred
                                    Shares    Stock      Stock     apital      Deficit      Loss       Stock  Compensation  Total
                                   --------  -------  ----------  ----------  ----------  ----------  --------  --------  ----------

<S>                                <C>       <C>      <C>         <C>         <C>         <C>         <C>       <C>       <C>
Balance at December 31, 2004  (as
   restated, see Note 1)            15,918   $  160   $ 173,650   $ 350,866   $ (77,044)  $ (39,989)  $(1,208)  $    (7)  $ 406,428
   Comprehensive income                  -        -           -           -      78,304      (8,161)                  -      70,143
   Issuance of common stock             79        -           -       1,250           -           -         -         -       1,250
   Tax benefit of stock options
     exercised and restricted
     stock vested                        -        -           -         646           -           -         -         -         646
   Dividends declared on Series A
     Preferred Stock                     -        -           -           -      (6,597)          -         -         -      (6,597)
   Amortization of deferred
     compensation                        -        -           -           -           -           -         -         7           7
                                   --------  -------  ----------  ----------  ----------  ----------  --------  --------  ----------

Balance at June 30, 2005            15,997   $  160   $ 173,650   $ 352,762   $  (5,337)  $ (48,150)  $(1,208)  $     -   $ 471,877
                                   ========  =======  ==========  ==========  ==========  ==========  ========  ========  ==========

</TABLE>

        See accompanying Notes to Consolidated Financial Statements
                                   - 8 -

<PAGE>


                           TITANIUM METALS CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Organization and basis of presentation

     Titanium Metals Corporation  ("TIMET") is a vertically  integrated producer
of  titanium  sponge,  melted  products  and a  variety  of  mill  products  for
aerospace,  industrial and other  applications.  The  accompanying  Consolidated
Financial  Statements  include  the  accounts  of TIMET and its  majority  owned
subsidiaries  (collectively,  the  "Company"),  except the TIMET Capital Trust I
(the "Capital Trust"). All material intercompany  transactions and balances with
consolidated  subsidiaries have been eliminated,  and certain prior year amounts
have  been  reclassified  to  conform  to the  current  year  presentation.  The
Consolidated  Balance Sheet at June 30, 2005 and the Consolidated  Statements of
Operations,  Comprehensive  Income (Loss),  Changes in Stockholders'  Equity and
Cash Flows for the interim  periods ended June 30, 2005 and 2004, as applicable,
have been prepared by the Company  without audit in accordance  with  accounting
principles  generally accepted in the United States of America ("GAAP").  In the
opinion  of  management,   all   adjustments   necessary  to  fairly  state  the
consolidated financial position,  results of operations and cash flows have been
made.  The  results  of  operations  for  interim  periods  are not  necessarily
indicative  of the  operating  results  of a full year or of future  operations.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with GAAP have been condensed or omitted.  The
Company's  first three  fiscal  quarters  reported are the  approximate  13-week
periods  ending on the  Saturday  generally  nearest  to March  31,  June 30 and
September 30. The Company's  fourth fiscal quarter and fiscal year always end on
December 31. For presentation  purposes,  the Company's  Consolidated  Financial
Statements and notes thereto have been presented as ending on March 31, June 30,
September 30 and  December  31, as  applicable.  The  accompanying  Consolidated
Financial  Statements  should  be  read in  conjunction  with  the  Consolidated
Financial  Statements  included in the Company's  Annual Report on Form 10-K for
the year ended December 31, 2004 (the "2004 Annual Report").

     At June 30, 2005,  Valhi,  Inc. and  subsidiaries  ("Valhi")  held 43.8% of
TIMET's  outstanding  common  stock  and 0.4% of the  Company's  6.75%  Series A
Convertible  Preferred Stock (the "Series A Preferred Stock"). At June 30, 2005,
the Combined Master Retirement Trust ("CMRT"), a trust formed by Valhi to permit
the collective investment by trusts that maintain the assets of certain employee
benefit plans adopted by Valhi and certain related companies,  held 12.0% of the
Company's  common stock.  TIMET's U.S.  pension plans invest in a portion of the
CMRT  that  does  not  hold  TIMET  common  stock.  At June  30,  2005,  Contran
Corporation  ("Contran") held, directly or through  subsidiaries,  approximately
91%  of  Valhi's  outstanding  common  stock.  Substantially  all  of  Contran's
outstanding  voting  stock is held by  trusts  established  for the  benefit  of
certain children and grandchildren of Harold C. Simmons, of which Mr. Simmons is
sole trustee,  or is held by Mr. Simmons or persons or other entities related to
Mr.  Simmons.  In  addition,  Mr.  Simmons is the sole trustee of the CMRT and a
member of the trust  investment  committee for the CMRT.  At June 30, 2005,  Mr.
Simmons directly owned 0.8% of TIMET's outstanding common stock and Mr. Simmons'
spouse  owned  40.9% of the  Company's  outstanding  Series A  Preferred  Stock.
Consequently,  Mr.  Simmons may be deemed to control each of Contran,  Valhi and
TIMET.

                                      - 9 -

<PAGE>


     Effective  January 1, 2005,  the Company  changed its method for  inventory
costing  from the  last-in,  first-out  ("LIFO")  cost  method  to the  specific
identification cost method for the approximate 40% of the Company's consolidated
inventories  previously  accounted  for  under the LIFO  cost  method.  With the
significant  volatility  seen  recently  in raw  material  prices,  the  Company
believes this change in accounting method provides a better matching of revenues
and  expenses.  As required by GAAP,  the Company  has  restated  its  financial
statements for prior periods.  As a result,  the Company's net inventory balance
as of December 31, 2004 increased by $26.7 million from the previously  reported
amount,  with a  corresponding  decrease to the Company's  accumulated  deficit.
There was no impact on the Company's cash flow from  operations for the three or
six months ended June 30, 2004 related to this accounting  change. The effect of
the accounting change on income for the three and six months ended June 30, 2004
was to (i) increase net income by $1.5  million and $1.9  million,  respectively
and (ii)  increase  earnings  per basic and  diluted  share by $0.09 and  $0.13,
respectively. See Note 2.

     The Company completed a five-for-one stock split of its common stock, which
was effected in the form of a stock dividend  (whereby an additional four shares
of post-split  stock were distributed for each one share of pre-split stock) and
became  effective  after the close of trading on August 27, 2004.  All share and
per share  disclosures  for the 2004 period have been adjusted to give effect to
this stock split.

     The Company  currently  follows the  disclosure  alternative  prescribed by
Statement of Financial  Accounting  Standards  ("SFAS") No. 123,  Accounting for
Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based
Compensation  -  Transition  and  Disclosure,  and has chosen to account for its
stock-based  employee  compensation  related to stock options in accordance with
Accounting  Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees,  and its various  interpretations.  See Note 15. Under APB Opinion
No. 25,  compensation  cost is generally  recognized for fixed stock options for
which the exercise price is less than the market price of the  underlying  stock
on the grant date.  All of the  Company's  stock  options have been granted with
exercise  prices equal to or in excess of the market price on the date of grant,
and the Company recognized no compensation  expense for stock options during the
three and six months  ended June 30,  2005 and 2004.  If the Company had applied
the fair value  recognition  provisions of SFAS No. 123 to all options  granted,
basic and diluted earnings per share  attributable to common  stockholders would
have been  unchanged  for the three and six months ended June 30, 2005,  and the
three months ended June 30, 2004. For the six months ended June 30, 2004,  basic
and diluted earnings per share would have decreased by $0.01.

     VALTIMET,  the Company's 43.7% owned affiliate  accounted for by the equity
method, has entered into certain derivative  financial  instruments that qualify
as cash flow hedges  under GAAP.  The  Company's  pro-rata  share of  VALTIMET's
unrealized  net gains  (losses)  on such  derivative  financial  instruments  is
included as a component of other comprehensive income.

                                     - 10 -

<PAGE>


Note 2 - Inventories

<TABLE>
                                                                                  June 30,             December 31,
                                                                                   2005                   2004
                                                                            -------------------    -------------------
                                                                                         (In thousands)

<S>                                                                         <C>                    <C>
Raw materials                                                               $          89,141      $        71,067
Work-in-process                                                                       121,309               97,848
Finished products                                                                      82,261               77,012
Supplies                                                                               12,550               12,397
                                                                            -------------------    -------------------

                                                                            $         305,261      $       258,324
                                                                            ===================    ===================
</TABLE>

     Effective  January 1, 2005,  the Company  changed its method for  inventory
costing from the LIFO cost method to the specific identification cost method, as
described in Note 1. As a result of this  accounting  change,  the Company's net
inventory  balance as of December 31, 2004  increased by $26.7  million from the
previously  reported amount  (representing the elimination of the Company's LIFO
reserve at such date).

Note 3 - Marketable securities

     The following table  summarizes the Company's  marketable  securities as of
June 30, 2005 and December 31, 2004:

<TABLE>
                                                             June 30, 2005                    December 31, 2004
                                                      -----------------------------    --------------------------------
                                                                         Market                              Market
              Marketable security                        Shares          value             Shares            value
------------------------------------------------      ------------    -------------    --------------    --------------
                                                                              ($ in thousands)

<S>                                                     <C>           <C>                <C>             <C>
    CompX International, Inc. ("CompX")                 2,696,420     $     45,785       2,549,520       $    42,144
    NL Industries, Inc. ("NL")                            222,100            3,387         222,100             4,908
    Kronos Worldwide, Inc. ("Kronos")                       5,203              156           3,985               162
                                                                      -------------                      --------------

                                                                      $     49,328                       $    47,214
                                                                      =============                      ==============
</TABLE>

     During the first  nine  months of 2004,  the  Company  purchased  2,212,820
shares of CompX Class A common shares and, on October 1, 2004,  contributed such
shares to CompX Group, Inc. ("CGI") in return for a 17.6% ownership  interest in
CGI (the  remaining  82.4%  interest  is held by NL).  As of June  30,  2005 and
December  31,  2004,  the Company  directly  held  483,600  and 336,700  shares,
respectively,  of CompX, which were purchased subsequent to October 1, 2004. The
Company has not  contributed any of the 483,600 shares  purchased  subsequent to
October 1, 2004, and currently does not expect to contribute those shares or any
other shares of CompX Class A common stock that it may subsequently  acquire, to
CGI.

     During each of the first and second quarters of 2005, CompX and Kronos each
paid cash dividends on their  respective  common stock. NL, which paid its first
quarter 2005  dividend in the form of shares of Kronos  common  stock,  paid its
second quarter 2005 dividend in the form of cash. See Note 9.

                                     - 11 -

<PAGE>


Note 4 - Property and equipment
<TABLE>

                                                                                  June 30,             December 31,
                                                                                    2005                   2004
                                                                             -------------------    ------------------
                                                                                          (In thousands)

<S>                                                                          <C>                    <C>
Land and improvements                                                        $           6,309      $         8,703
Buildings and improvements                                                              31,799               31,780
Information technology systems                                                          61,257               63,609
Manufacturing equipment and other                                                      324,949              333,031
Construction in progress                                                                41,397               14,819
                                                                             -------------------    ------------------
                                                                                       465,711              451,942
Less accumulated depreciation                                                          223,663              223,769
                                                                             -------------------    ------------------

                                                                             $         242,048      $       228,173
                                                                             ===================    ==================
</TABLE>

     During the first quarter of 2005,  the Company  determined  that certain of
its manufacturing equipment would no longer be utilized in its operations,  and,
accordingly,  recognized a $1.2 million  noncash  abandonment  charge to cost of
sales during the period.

     In November 2004, pursuant to an agreement with Basic Management,  Inc. and
certain of its affiliates  ("BMI"),  the Company sold certain  property  located
adjacent  to its  Henderson,  Nevada  plant  site to BMI, a  32%-owned  indirect
subsidiary  of Valhi and recorded a $12.0  million  deferred gain related to the
cash proceeds  received in November 2004. During the second quarter of 2005, the
Company ceased using the property and,  accordingly,  recognized a $13.9 million
gain  related  to the  sale of such  property,  which  is  comprised  of (i) the
previously  reported $12.0 million cash proceeds received in November 2004, (ii)
the reversal of $0.6  million  previously  accrued by the Company for  potential
environmental  issues  related  to the  property  and (iii) an  additional  $1.2
million cash payment received from BMI in June 2005. See Note 9.

Note 5 - Other noncurrent assets

<TABLE>
                                                                                  June 30,             December 31,
                                                                                    2005                  2004
                                                                             -------------------    ------------------
                                                                                          (In thousands)

<S>                                                                          <C>                    <C>
Prepaid pension cost                                                         $          10,564      $        10,531
Deferred financing costs                                                                   181                  786
Notes receivable from officers                                                              39                   49
Other                                                                                      183                  211
                                                                             -------------------    ------------------

                                                                             $          10,967      $        11,577
                                                                             ===================    ==================
</TABLE>

                                     - 12 -

<PAGE>


Note 6 - Accrued liabilities

<TABLE>
                                                                                  June 30,             December 31,
                                                                                    2005                  2004
                                                                             -------------------    ------------------
                                                                                          (In thousands)

<S>                                                                          <C>                    <C>
OPEB cost                                                                    $           2,716      $         2,777
Pension cost                                                                             4,942                5,285
Payroll and vacation                                                                     6,973                5,810
Performance-based employee incentive compensation                                       10,218               12,570
Other employee benefits                                                                  9,123                9,721
Deferred income                                                                          2,275                1,736
Environmental costs                                                                      1,586                2,530
Taxes, other than income                                                                 5,035                4,166
Other                                                                                    7,268                8,535
                                                                             -------------------    ------------------

                                                                             $          50,136      $        53,130
                                                                             ===================    ==================

</TABLE>



Note 7 - Customer advances

     Under the  terms of the  Company's  long-term  agreement  ("LTA")  with The
Boeing Company  ("Boeing"),  in 2002 through 2007, Boeing is required to advance
TIMET $28.5 million annually less $3.80 per pound of titanium product  purchased
by Boeing  subcontractors  from TIMET  during the  preceding  year.  The advance
relates to Boeing's  take-or-pay  obligations  under the LTA.  Effectively,  the
Company  collects  $3.80 less from Boeing  than the LTA  selling  price for each
pound of  titanium  product  sold  directly  to Boeing and  reduces  the related
customer advance recorded by the Company.  For titanium  products sold to Boeing
subcontractors,  the  Company  collects  the full LTA selling  price,  but gives
Boeing credit by reducing the next year's  annual  advance by $3.80 per pound of
titanium product sold to Boeing  subcontractors.  The Boeing customer advance is
also  reduced  as  take-or-pay  benefits  are  earned.  As  of  June  30,  2005,
approximately  $22.8 million of customer  advances  related to the Company's LTA
with Boeing.

Note 8 - Bank debt

     During the second  quarter of 2005,  the Company  amended  its U.S.  credit
facility to increase its maximum authorized borrowings from $105 million to $125
million.   In  addition,   the  amended  credit  facility   reduced  the  excess
availability  requirement  related to the payment of dividends on the  Company's
Series A  Preferred  Stock  and  distributions  on the  Capital  Trust's  6.625%
mandatorily  redeemable  convertible preferred securities,  beneficial unsecured
convertible securities ("BUCS") from $25 million to $10 million.

     During the second  quarter of 2005,  the  Company's  subsidiary,  TIMET UK,
terminated its previous credit  agreement and entered into a new working capital
credit  facility  that  expires  on April 30,  2008.  Under the new U.K.  credit
facility,  TIMET  UK  may  borrow  up  to  (pound)22.5  million,  subject  to  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and property, plant and equipment.  Borrowings under the U.K. facility
can be in various  currencies,  including U.S. dollars,  British pounds sterling
and euros and are  collateralized  by  substantially  all of TIMET UK's  assets.
Interest on  outstanding  borrowings  generally  accrues at rates that vary from
1.125% to 1.375%  above the  lender's  published  base rate.  The U.K.  facility
agreement  also contains  financial  ratios and  covenants  customary in lending
transactions of this type, including a minimum net worth covenant.

                                     - 13 -

<PAGE>

     As of June 30,  2005,  the  Company  had  outstanding  borrowings  of $66.1
million  under its U.S.  credit  agreement  and $0.6 million  under its European
credit facilities.  Aggregate unused borrowing  availability under the Company's
U.S. and European credit  facilities was  approximately  $110 million as of June
30, 2005.

Note 9 - Other income (expense)

<TABLE>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005             2004              2005             2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Other operating income (expense):
   Settlement of customer claim                     $          -      $          -     $      1,800      $          -
   Boeing take-or-pay                                        444             2,507              444             2,507
   Other, net                                                246               271              432               346
                                                    --------------    -------------    --------------    -------------

                                                    $        690      $      2,778     $      2,676      $      2,853
                                                    ==============    =============    ==============    =============

Other non-operating income (expense):
   Dividends and interest                           $        462      $         35     $        949      $        187
   Equity in earnings of common
     securities of the Capital Trust                         103               103              206               217
   Gain on sale of property (Note 4)                      13,881                 -           13,881                 -
   Foreign exchange gain, net                              1,272                99            1,532               571
   Other, net                                               (292)              (78)            (399)              (78)
                                                    --------------    -------------    --------------    -------------

                                                    $     15,426      $        159     $     16,169      $        897
                                                    ==============    =============    ==============    =============
</TABLE>

     During the first quarter of 2005, the Company received $1.8 million related
to its settlement of a customer claim regarding prior order  cancellations  from
such customer. Additionally, the Company received dividends from its investments
in marketable securities, as discussed in Note 3.

                                     - 14 -

<PAGE>


Note 10 - Income taxes

<TABLE>
                                                                                    Six months ended June 30,
                                                                             -----------------------------------------
                                                                                   2005                   2004
                                                                             ------------------    -------------------
                                                                                          (In thousands)

<S>                                                                          <C>                   <C>
Expected income tax expense, at 35%                                          $        24,804       $           1,485
Non-U.S. tax rates                                                                      (811)                   (166)
U.S. state income taxes, net                                                             472                    (208)
Dividends received deduction                                                            (110)                    (13)
Change in state income tax law                                                           550                       -
Tax on repatriation of foreign earnings                                                  998                       -
Adjustment of deferred income tax asset
   valuation allowance                                                               (35,592)                     44
Other, net                                                                               149                     179
                                                                             ------------------    -------------------

                                                                             $        (9,540)      $           1,321
                                                                             ==================    ===================
</TABLE>

     The  Company  periodically  reviews  its  deferred  income  tax  assets  to
determine  if future  realization  is more  likely  than not.  During  the first
quarter of 2005, based on the Company's recent history of U.S. income,  its near
term  outlook and the effect of its change in method of  inventory  costing from
the LIFO cost method to the specific identification cost method for U.S. federal
income tax  purposes  (see Note 1), the  Company  changed  its  estimate  of its
ability to utilize  the tax  benefits of its U.S.  net  operating  loss  ("NOL")
carryforwards,  alternative  minimum tax ("AMT") credit  carryforwards and other
net deductible  temporary  differences (other than the majority of the Company's
capital loss carryforwards).  Consequently,  the Company determined that its net
deferred  income tax asset  related to such U.S.  tax  attributes  and other net
deductible   temporary   differences   now  meets   the   "more-likely-than-not"
recognition  criteria.  Accordingly,  the Company  reversed $22.6 million of the
valuation  allowance  attributable to such U.S. deferred income tax asset in the
first half of 2005 ($5.3  million in the second  quarter)  and the Company  will
reverse the remaining  valuation  allowance  attributable to such U.S.  deferred
income  tax asset of $14.2  million  during  the final two  quarters  of 2005 in
accordance with the GAAP  requirements of accounting for income taxes at interim
dates.

     During the first quarter of 2005,  based on the Company's recent history of
U.K.  income,  its near term outlook and its historic  U.K.  profitability,  the
Company also  changed its estimate of its ability to utilize its net  deductible
temporary  differences and other tax attributes  related to the U.K.,  primarily
comprised of (i) the future  benefits  associated  with the reversal of its U.K.
minimum pension liability deferred income tax asset and (ii) the benefits of its
U.K.  NOL  carryforward.  Consequently,  the  Company  determined  that  its net
deferred  income  tax asset in the U.K.  now  meets  the  "more-likely-than-not"
recognition  criteria.  Accordingly,  the Company  reversed $13.0 million of the
valuation allowance  attributable to such deferred income tax asset in the first
half of 2005 ($0.4  million in the second  quarter) and the Company will reverse
the  remaining  U.K.  valuation  allowance of $0.4 million  during the final two
quarters of 2005 in accordance  with the GAAP  requirements  of  accounting  for
income taxes at interim dates.

     At June 30, 2005,  the Company had, for U.S.  federal  income tax purposes,
(i) NOL  carryforwards  of $72 million that expire in 2020 through 2023,  (ii) a
capital  loss  carryforward  of $73 million  that  expires in 2008 and (iii) AMT
credit  carryforwards  of $4 million,  which can be  utilized to offset  regular
income taxes payable in future years, with an indefinite carryforward period. In
addition,  at June 30, 2005,  the Company had the equivalent of a $1 million NOL
carryforward in Germany, which has an indefinite carryforward period.

                                     - 15 -

<PAGE>


     In October  2004,  the American  Jobs Creation Act of 2004 was enacted into
law.  The new law  provides for a special 85%  deduction  for certain  dividends
received from controlled foreign  corporations in 2005. In the second quarter of
2005, the Company  completed its evaluation of this new provision and determined
that it would  benefit  from  the  special  dividend  received  deduction.  As a
consequence,  the  Company  plans to  repatriate  approximately  $19  million of
earnings from its European  subsidiaries  in the third quarter of 2005. The $1.0
million related tax impact of this repatriation has been recorded as tax expense
in the second quarter in accordance with the requirements of FASB Staff Position
No. 109-2.  However, the Company has not provided for U.S. deferred income taxes
or foreign  withholding taxes on basis differences in its non-U.S.  subsidiaries
that  result  primarily  from  undistributed  earnings  the  Company  intends to
reinvest  indefinitely.  Determination  of the deferred  income tax liability on
these basis  differences is not practicable  because such liability,  if any, is
dependent on circumstances existing if and when remittance occurs.

     The new law also provides for a special  deduction from U.S. taxable income
equal to a  specified  percentage  of a U.S.  company's  qualified  income  from
domestic  manufacturing  activities (as defined).  Although the Company believes
that the majority of its operations  meet the  definition of qualified  domestic
manufacturing  activities,  the  Company  does not  expect to  benefit  from the
special manufacturing  deduction in 2005, primarily because the Company projects
its U.S.  taxable  income in 2005 will be fully offset by its existing  U.S. NOL
carryforwards.

     In June 2005,  the State of Ohio  enacted a new tax law,  which  phases out
Ohio's  existing income tax system over the next five years and replaces it with
a tax based on gross  receipts.  In the second  quarter of 2005,  as a result of
this phase out, the Company reduced its deferred income tax asset related to its
Ohio NOL carryforwards by $0.6 million.

Note 11 - Employee benefits

     Defined benefit pension plans.  The components of the net periodic  pension
expense are set forth below:

<TABLE>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005              2004             2005              2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Service cost                                        $        940      $        792     $      1,897      $      1,677
Interest cost                                              3,462             3,143            6,952             6,294
Expected return on plan assets                            (3,756)           (3,265)          (7,547)           (6,534)
Amortization of net losses                                 1,229             1,091            2,454             2,184
Amortization of unrecognized prior                                                                                244
   service cost                                              139               122              278
                                                    --------------    -------------    --------------    -------------

   Net periodic pension expense                     $      2,014      $      1,883     $      4,034      $      3,865
                                                    ==============    =============    ==============    =============
</TABLE>

     Through  June  30,  2005,  the  Company  has  made  $4.6  million  of  cash
contributions  to its defined  benefit  pension  plans in 2005,  and the Company
currently  expects to make additional cash  contributions of approximately  $4.3
million to its defined  benefit  pension plans during the remainder of 2005. All
of the contributions relate to the Company's U.K. plan.

                                     - 16 -

<PAGE>


     Postretirement benefits other than pensions. The components of net periodic
OPEB expense are set forth below:

<TABLE>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005             2004              2005             2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)

<S>                                                 <C>               <C>              <C>               <C>
Service cost                                        $        160      $        126     $        331      $       253
Interest cost                                                359               403              826              806
Amortization of unrecognized prior
   service cost                                             (116)             (116)            (232)            (232)
Amortization of net losses                                   166               227              490              454
                                                    --------------    -------------    --------------    -------------

   Net periodic OPEB expense                        $        569      $        640     $      1,415      $     1,281
                                                    ==============    =============    ==============    =============
</TABLE>

     The Medicare  Prescription Drug,  Improvement and Modernization Act of 2003
(the  "Medicare  Act of 2003")  introduced a  prescription  drug  benefit  under
Medicare  (Medicare Part D) as well as a federal  subsidy to sponsors of retiree
health care benefit  plans that  provide a benefit that is at least  actuarially
equivalent to Medicare Part D. In May 2004, the Financial  Accounting  Standards
Board ("FASB")  issued FSP No. 106-2 which  provides  guidance on (i) accounting
for  the  effects  of the  Medicare  Act of 2003  once  the  Company  is able to
determine actuarial equivalency and (ii) various required disclosures.

     During 2005, the Company  determined that the benefits provided by its U.S.
health and  welfare  plan are  actuarially  equivalent  to the  Medicare  Part D
benefit and therefore the Company is eligible for the federal  subsidy  provided
for by the Medicare  2003 Act. The effect of such  subsidy,  which was accounted
for  prospectively  from  the  date  actuarial  equivalence  was  determined  as
permitted and in accordance  with FASB Staff  Position No. 106-2,  resulted in a
reduction in the  Company's  accumulated  OPEB  obligation of  approximately  $5
million and a reduction in net periodic OPEB cost of approximately  $0.6 million
in 2005.

Note 12 - Commitments and contingencies

     Environmental  matters.  In November 2004, the Company and BMI entered into
several agreements  pursuant to which the Company conveyed certain land owned by
the Company  adjacent to its  Henderson,  Nevada plant site on which the Company
operated  settling  ponds  (the  "TIMET  Pond  Property")  to BMI.  See  Note 4.
Subsequent  to the  conveyance,  TIMET  continued to use certain of the settling
ponds  located on the TIMET Pond  Property  (pursuant to a lease with BMI) until
May  2005,  at which  time  all such  usage  ceased.  Based on the  terms of the
conveyance agreement, BMI assumed the Company's obligation for certain potential
environmental issues related to the TIMET Pond Property.

     The  Company is also  continuing  assessment  work with  respect to its own
active plant site in Henderson,  Nevada.  The Company currently has $3.3 million
accrued  based on the  undiscounted  cost  estimates of the  probable  costs for
remediation of this site related to specific future  remediation costs which the
Company now considers probable. The Company expects these accrued expenses to be
paid over a period of up to thirty years.

                                     - 17 -

<PAGE>


     At June 30, 2005,  the Company had accrued an  aggregate  of  approximately
$3.5 million for  environmental  matters,  including those discussed  above. The
upper end of the range of reasonably  possible costs to remediate  these matters
is  approximately  $6  million.  The  Company  records  liabilities  related  to
environmental  remediation  obligations when estimated future costs are probable
and  reasonably  estimable.  Such  accruals are adjusted as further  information
becomes  available  or  circumstances  change.  Estimated  future  costs are not
discounted to their present  value.  It is not possible to estimate the range of
costs  for  certain  sites.  The  imposition  of  more  stringent  standards  or
requirements  under  environmental  laws or  regulations,  the results of future
testing and analysis undertaken by the Company at its operating facilities, or a
determination  that the Company is  potentially  responsible  for the release of
hazardous  substances at other sites, could result in costs in excess of amounts
currently  estimated to be required for such matters.  No assurance can be given
that  actual  costs  will not exceed  accrued  amounts or that costs will not be
incurred  with  respect to sites as to which no problem  is  currently  known or
where no estimate can presently be made. Further, there can be no assurance that
additional environmental matters will not arise in the future.

     Legal  proceedings.  The  Company  records  liabilities  related  to  legal
proceedings  when estimated  costs are probable and reasonably  estimable.  Such
accruals are adjusted as further  information becomes available or circumstances
change.  Estimated future costs are not discounted to their present value. It is
not  possible to estimate the range of costs for certain  matters.  No assurance
can be given that  actual  costs will not exceed  accrued  amounts or that costs
will not be incurred with respect to matters as to which no problem is currently
known or where no  estimate  can  presently  be made.  Further,  there can be no
assurance that additional legal proceedings will not arise in the future.

     Other. The Company has entered into letters of credit to collateralize  (i)
potential workers'  compensation claims in Ohio and Nevada and (ii) future usage
of electricity in Nevada. As of June 30, 2005, the outstanding  amounts for such
letters of credit, which reduce the Company's excess availability under its U.S.
credit agreement, were $2.3 million and $1.3 million, respectively.

     The Company is involved in various employment, environmental,  contractual,
product  liability and other claims,  disputes and litigation  incidental to its
business  including those discussed above.  While management  currently believes
that the outcome of these matters,  individually and in the aggregate,  will not
have a material adverse effect on the Company's financial position, liquidity or
overall  trends in  results  of  operations,  all such  matters  are  subject to
inherent  uncertainties.  Were an  unfavorable  outcome to occur with respect to
several of these matters in a given period,  it is possible that it could have a
material  adverse  impact on the  results  of  operations  or cash flows in that
particular period.

     See the 2004 Annual Report for additional  information  concerning  certain
legal and environmental matters, commitments and contingencies.

Note 13 - Earnings per share

     Basic  earnings  per  share is  based on the  weighted  average  number  of
unrestricted common shares outstanding during each period.  Diluted earnings per
share attributable to common stockholders reflects the dilutive effect of common
stock options, restricted stock and the assumed conversion of the Company's BUCS
and the  Series A  Preferred  Stock,  if  applicable.  A  reconciliation  of the
numerator and denominator  used in the calculation of basic and diluted earnings
per share is presented below:

                                     - 18 -

<PAGE>

<TABLE>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005             2004              2005             2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)
<S>                                                 <C>               <C>              <C>               <C>
Numerator:
  Net income attributable to common
     stockholders                                   $     33,601      $      3,385     $     71,707      $      2,161
  Interest on BUCS (1)                                        83                 -              174                 -
  Dividends on Series A                                                                       6,597
     Preferred Stock                                       3,298                 -                                  -
                                                    --------------    -------------    --------------    -------------

  Diluted net income attributable
     to common stockholders                         $     36,982      $      3,385     $     78,478      $      2,161
                                                    ==============    =============    ==============    =============

Denominator:
  Average common shares outstanding                       15,993            15,879           15,961            15,871
  Average dilutive stock options
     and restricted stock                                     74                56               76                44
  BUCS (1)                                                    77                 -               77                 -
  Series A Preferred Stock                                 6,515                 -            6,515                 -
                                                    --------------    -------------    --------------    -------------

Diluted shares                                            22,659            15,935           22,629            15,915
                                                    ==============    =============    ==============    =============
----------------------------------------------------------------------------------------------------------------------
<FN>
(1) Antidilutive during 2004.
</FN>

</TABLE>



     Stock options to purchase  252,540  shares of common stock during the three
and six months  ended June 30, 2005 and  308,400  and  383,200  shares of common
stock during the three and six months ended June 30,  2004,  respectively,  were
excluded from the calculation of diluted earnings per share because the exercise
price for such options was greater  than the average  market price of the common
shares and such  options  were  therefore  antidilutive  during  the  respective
period.  Net income  attributable to common  stockholders  for the three and six
months ended June 30, 2005 included $1.1 million ($0.28 per  outstanding  share)
of undeclared dividends on its Series A Preferred Stock.

                                     - 19 -

<PAGE>


Note 14 - Business segment information

     The Company's  production  facilities are located in the U.S., U.K., France
and Italy,  and its products are sold throughout the world.  The Company's Chief
Executive  Officer is the Company's chief  operating  decision maker ("CODM") as
that  term  is  defined  in SFAS  No.  131,  Disclosures  about  Segments  of an
Enterprise  and Related  Information.  The CODM receives  financial  information
about TIMET from which he makes decisions  concerning  resource  utilization and
performance analysis only on a global, consolidated basis. Based upon this level
of  decision-making,  the  Company  currently  has one  segment,  its  worldwide
"Titanium  melted and mill products"  segment.  Sales,  gross margin,  operating
income,  inventory  and  receivables  are the key  management  measures  used to
evaluate segment  performance.  The following table provides segment information
supplemental to the Company's Consolidated Financial Statements:

<TABLE>

                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005             2004              2005             2004
                                                    --------------    -------------    --------------    -------------
                                                             ($ in thousands, except product shipment data)
<S>                                                 <C>               <C>              <C>               <C>
Titanium melted and mill products:
   Melted product net sales                         $     23,780      $     18,089     $     45,844      $     35,402
   Mill product net sales                                131,763            89,755          245,686           180,730
   Other product sales                                    28,203            16,281           47,451            28,481
                                                    --------------    -------------    --------------    -------------

                                                    $    183,746      $    124,125     $    338,981      $    244,613
                                                    ==============    =============    ==============    =============

Melted product shipments:
   Volume (metric tons)                                    1,355             1,335            2,770             2,755
   Average selling price ($ per kilogram)           $      17.55      $      13.55     $      16.55      $      12.85

Mill product shipments:
   Volume (metric tons)                                    3,340             2,900            6,440             5,830
   Average selling price ($ per kilogram)           $      39.45      $      30.95     $      38.15      $      31.00

</TABLE>

Note 15 - Accounting principles not yet adopted

     In  November  2004,  the FASB  issued SFAS No.  151,  Inventory  Costs,  an
amendment of ARB No. 43, Chapter 4 ("SFAS No. 151"),  which  clarifies the types
of costs that should be expensed  rather than  capitalized  as  inventory.  This
statement  also  clarifies the  circumstances  under which fixed  overhead costs
associated with operating  facilities involved in inventory processing should be
capitalized.  The guidance is effective  for  inventory  costs  incurred  during
fiscal years  beginning after June 15, 2005, and the Company will adopt SFAS No.
151 no later than  January 1,  2006.  The  Company  has not yet  determined  the
impact,  if any, that this  statement  will have on its  consolidated  financial
position or results of operations.

                                     - 20 -

<PAGE>


     In December 2004, the FASB issued SFAS No. 123 (revised 2004),  Share-Based
Payment  ("SFAS No.  123R"),  which replaces SFAS No. 123 and supersedes APB No.
25. SFAS No. 123R requires the measurement of all employee  share-based payments
to employees,  including  grants of employee stock options,  to be recognized in
the financial  statements  based on their fair values.  Under SFAS No. 123R, the
pro forma disclosures  previously permitted under SFAS No. 123 will no longer be
an  alternative  to  financial  statement  recognition.   As  permitted  by  SEC
regulations, the Company will adopt SFAS No. 123R as of January 1, 2006 and does
not believe the adoption of SFAS No. 123R will have any effect on the  Company's
financial  position  or results  of  operations,  as all of TIMET's  outstanding
options are fully vested.

Note 16 - Subsequent events

     During July 2005, certain holders of the Series A Preferred Stock converted
an aggregate of 55,221 shares of the Series A Preferred Stock into 92,034 shares
of TIMET's common stock (at the conversion  rate of one and two-third  shares of
common stock for each share of Series A Preferred Stock tendered).

                                     - 21 -

<PAGE>


Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

     Summarized  financial  information.  The following table summarizes certain
information  regarding the Company's results of operations for the three and six
months ended June 30, 2005 and 2004.  Average selling prices, as reported by the
Company,  are a reflection  of not just actual  selling  prices  received by the
Company,  but also include other related factors such as currency exchange rates
and customer  and product mix during a given  period.  Consequently,  changes in
average  selling  prices  from  period to period  will be  impacted  by  changes
occurring not just in actual  prices,  but by these other  factors as well.  The
percentage  change  information  presented  below  represents  changes  from the
respective  prior  year.  See  "Results  of  Operations  - Outlook"  for further
discussion of the Company's business expectations for the remainder of 2005.

<TABLE>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005             2004              2005             2004
                                                    --------------    -------------    --------------    -------------
                                                             ($ in thousands, except product shipment data)
<S>                                                 <C>               <C>              <C>               <C>
Net sales:
   Melted products                                  $     23,780      $     18,089     $     45,844      $     35,402
   Mill products                                         131,763            89,755          245,686           180,730
   Other products                                         28,203            16,281           47,451            28,481
                                                    --------------    -------------    --------------    -------------

Net sales                                           $    183,746      $    124,125     $    338,981      $    244,613
                                                    ==============    =============    ==============    =============

Gross margin (1)                                          47,880            17,006           76,835            29,791
Gross margin percent of net sales (1)                         26%               14%              23%               12%

Melted product shipments:
   Volume (metric tons)                                    1,355             1,335            2,770             2,755
   Average selling price ($ per kilogram)           $      17.55      $      13.55     $      16.55      $      12.85

Mill product shipments:
   Volume (metric tons)                                    3,340             2,900            6,440             5,830
   Average selling price ($ per kilogram)           $      39.45      $      30.95     $      38.15      $      31.00

Percentage change in:
   Sales volume:
       Melted products                                        +1                +3               +1               +21
       Mill products                                         +15               +33              +10               +30

   Average selling prices:
       Melted products                                       +30                +8              +29                +1
       Mill products                                         +27                -3              +23                -3

   Selling prices - excludes changes in
     product mix:
       Melted products                                       +22                +6              +19                +2
       Mill products in U.S. dollars                         +21                +3              +19                +3
       Mill products in billing currencies (2)               +20                -2              +17                -2

----------------------------------------------------------------------------------------------------------------------
<FN>

(1)  The 2004 periods have been restated for the  Company's  change in method of
     inventory  costing,  effective on January 1, 2005. See Notes 1 and 2 to the
     Consolidated Financial Statements.

(2)  Excludes the effect of changes in foreign currencies.

</FN>

</TABLE>

                                     - 22 -

<PAGE>

     Second quarter of 2005 compared to second  quarter of 2004.  Melted product
sales  increased  31% and mill  product  sales  increased  47% during the second
quarter of 2005 compared to the year ago period,  primarily  due to  significant
increases in average  selling  prices for both melted and mill  products.  Other
non-mill  product  sales  increased  73%  compared  to the year ago  period  due
principally to higher selling prices for titanium scrap and improved  demand for
the Company's fabrication  products.  Average selling prices use actual customer
and  product mix and  foreign  currency  exchange  rates  prevailing  during the
respective  periods.  The Company's  melted  products are generally sold only in
U.S.  dollars.  Average  selling  prices for both melted and mill  products were
positively  affected by current  market  conditions  and changes in customer and
product mix. Mill product  average  selling  prices during the second quarter of
2005 were also positively  affected by the relative  weakness of the U.S. dollar
compared to both the British pound sterling and the euro.

     In addition to average selling price increases,  the second quarter of 2005
was  positively  impacted  by a 15%  increase  in  mill  product  sales  volume,
primarily driven by increased demand from the commercial aerospace market.

     Effective  January 1, 2005,  the Company  changed its method for  inventory
costing from the LIFO cost method to the specific identification cost method for
the  approximate  40%  of  the  Company's  consolidated  inventories  previously
accounted for under the LIFO cost method.  With the significant  volatility seen
recently in raw material prices,  the Company believes this change in accounting
method provides a better matching of revenues and expenses. As required by GAAP,
the Company has restated its financial statements for prior periods. As a result
of this change,  the Company's cost of sales for the three months ended June 30,
2004 was  restated  to $107.2  million,  a  decrease  of $1.5  million  from the
previously  reported  amount.  See Notes 1 and 2 to the  Consolidated  Financial
Statements.

     Gross  margin  (net sales less cost of sales)  increased  during the second
quarter of 2005 compared to the year ago period  primarily due to higher average
selling  prices  and  improved  plant  operating  rates  (from 72% in the second
quarter of 2004 to 80% in the second quarter of 2005). In addition,  the Company
generated an  additional  $6.7 million of gross margin from the sale of titanium
scrap and other non-mill products during the second quarter of 2005, as compared
to the year ago period.  These positive  effects were partially offset by higher
costs for raw  materials  and $2.5 million of  additional  costs during the 2005
period related to the accrual of certain  performance-based  employee  incentive
compensation payments, as compared to the year ago period.

     Selling,  general,  administrative and development  expenses increased from
$11.2  million  during the second  quarter of 2004 to $13.0  million  during the
second quarter of 2005,  principally as a result of increased  personnel  costs,
including  $0.6 million of  additional  costs  related to the accrual of certain
performance-based  employee incentive  compensation payments, as compared to the
year ago period.

     The Company recognized equity in earnings of joint ventures of $1.3 million
during the second quarter of 2005,  compared to equity in losses of $0.1 million
during  the year  ago  period.  This  change  was  principally  due to  improved
operating results of VALTIMET,  the Company's  minority-owned  welded tube joint
venture.

     Net other income  (expense)  decreased during the second quarter of 2005 as
compared to the year ago period  primarily  related to lower Boeing  take-or-pay
income during the 2005 period as compared to the 2004 period.  Boeing  purchased
approximately  728,000  pounds of  titanium  from the  Company  during  the 2005
period, as compared to approximately  477,000 pounds of titanium during the 2004
period.

                                     - 23 -

<PAGE>


     First six  months of 2005  compared  to first  six  months of 2004.  Melted
product  sales  increased  29% and mill product  sales  increased 36% during the
first six months of 2005 compared to the first six months of 2004, primarily due
to  significant  increases  in average  selling  prices for both melted and mill
products.  Other non-mill  product sales  increased 67% compared to the year ago
period due  principally to higher selling prices for titanium scrap and improved
demand for the Company's fabrication products. Average selling prices use actual
customer and product mix and foreign currency  exchange rates prevailing  during
the respective periods. Average selling prices for both melted and mill products
were  positively  affected by current market  conditions and changes in customer
and product mix. Mill product  average  selling prices during the second quarter
of 2005 were also  positively  affected  by the  relative  weakness  of the U.S.
dollar compared to both the British pound sterling and the euro.

     In addition to average selling price increases,  the first half of 2005 was
positively  impacted by a 10% increase in mill product sales  volume,  driven by
increased demand across all market segments.

     As a result  of the  Company's  change in  inventory  costing  methods  (as
previously discussed), the Company's cost of sales for the six months ended June
30, 2004 was  restated to $214.8  million,  a decrease of $1.9  million from the
previously  reported  amount.  See Notes 1 and 2 to the  Consolidated  Financial
Statements.

     Gross margin  increased  during the six months ended June 30, 2005 compared
to the year ago  period  primarily  due to higher  average  selling  prices  and
improved plant operating rates (from 72% in the first half of 2004 to 79% in the
first half of 2005).  In  addition,  the Company  generated an  additional  $9.8
million  of gross  margin  from the sale of  titanium  scrap and other  non-mill
products  during  the first  six  months of 2005,  as  compared  to the year ago
period.  These positive effects were offset by higher raw material costs as well
as charges to cost of sales during the 2005 period for:

     o    $3.8 million of additional costs during the 2005 period related to the
          accrual of certain  performance-based  employee incentive compensation
          payments, as compared to the first six months of 2004; and

     o    A $1.2  million  noncash  impairment  charge  during  the 2005  period
          related  to  the  Company's   abandonment  of  certain   manufacturing
          equipment.

     In addition, gross margin during the 2004 period was positively affected by
a $1.6 million  reduction in cost of sales  related to the  modification  of the
Company's vacation policy.

     Selling,  general,  administrative and development  expenses increased from
$20.7 million  during the first six months of 2004 to $25.3  million  during the
first  six  months  of 2005,  principally  as a result  of (i) $1.0  million  of
additional  auditing and consulting  costs incurred  during the first quarter of
2005 primarily related to the Company's compliance with the Sarbanes-Oxley Act's
internal control  requirements for the fiscal year ended December 31, 2004, (ii)
additional  personnel costs,  including $0.9 million of additional costs related
to the  accrual of certain  performance-based  employee  incentive  compensation
payments and (iii) a $0.3 million reduction in the first quarter of 2004 related
to the previously discussed change in the Company's vacation policy.

     The Company recognized equity in earnings of joint ventures of $2.1 million
during  the first  half of 2005,  compared  to equity in losses of $0.2  million
during  the first half of 2004.  This  change was  principally  due to  improved
operating results of VALTIMET.

                                     - 24 -

<PAGE>


     Net other income  (expense)  increased  during the first six months of 2005
primarily  related to (i) the Company's  receipt of $1.8 million from settlement
of a customer claim during the first quarter regarding prior order cancellations
from such  customer and (ii) lower  Boeing  take-or-pay  income  during the 2005
period as compared to the 2004 period. Boeing purchased  approximately 1,383,000
pounds of  titanium  from the  Company  during the 2005  period,  as compared to
approximately 840,000 pounds of titanium during the 2004 period.

     Non-operating income (expense).

<TABLE>
                                                          Three months ended                  Six months ended
                                                               June 30,                           June 30,
                                                    -------------------------------    -------------------------------
                                                         2005             2004              2005             2004
                                                    --------------    -------------    --------------    -------------
                                                                             (In thousands)
<S>                                                 <C>               <C>              <C>               <C>
Interest expense:
   On debt payable to the Capital Trust             $       (199)     $     (3,495)    $       (398)     $     (7,246)
   On bank debt and capital leases                          (744)             (593)          (1,219)           (1,152)
                                                    --------------    -------------    --------------    -------------

                                                    $       (943)     $     (4,088)    $     (1,617)     $     (8,398)
                                                    ==============    =============    ==============    =============

Dividends and interest                              $        462      $         35     $        949      $        187
Equity in earnings of common
   securities of the Capital Trust                           103               103              206               217
Gain on sale of property                                  13,881                 -           13,881                 -
Foreign exchange gain, net                                 1,272                99            1,532               571
Other, net                                                  (292)              (78)            (399)              (78)
                                                    --------------    -------------    --------------    -------------

                                                    $     15,426      $        159     $     16,169      $        897
                                                    ==============    =============    ==============    =============
</TABLE>

     Prior to September 1, 2004,  quarterly  interest  expense on the  Company's
debt payable to the Capital Trust  approximated  $3.4 million,  exclusive of any
accrued  interest on deferred  interest  payments.  On  September  1, 2004,  the
Company  exchanged  97.1% of its  outstanding  BUCS for its  Series A  Preferred
Stock.  Interest  expense  related to the remaining  debt payable to the Capital
Trust is  approximately  $0.2  million  per  quarter,  partially  offset by $0.1
million of equity in earnings  related to the  Company's  holdings of the common
securities of the Capital Trust.

     Dividends  and interest  income  during the three and six months ended June
30, 2005 and 2004 consisted of dividends  received on the Company's  investments
in  marketable   securities  and  interest   income  earned  on  cash  and  cash
equivalents.

     In November  2004,  pursuant to an  agreement  with BMI,  the Company  sold
certain property located adjacent to its Henderson,  Nevada plant site to BMI, a
32%-owned indirect  subsidiary of Valhi and recorded a $12 million deferred gain
related  to the cash  proceeds  received  in  November  2004.  During the second
quarter  of 2005,  the  Company  ceased  using the  property  and,  accordingly,
recognized a $13.9 million gain related to the sale of such  property,  which is
comprised of (i) the previously reported $12.0 million cash proceeds received in
November  2004,  (ii) the  reversal of $0.6  million  previously  accrued by the
Company for potential  environmental issues related to the property and (iii) an
additional $1.2 million cash payment received from BMI in June 2005.

                                     - 25 -
<PAGE>


     Income  taxes.  The Company  operates in several tax  jurisdictions  and is
subject to varying income tax rates.  As a result,  the geographic mix of pretax
income or loss can impact the Company's  overall effective tax rate. For the six
months ended June 30, 2005 and 2004,  the Company's  income tax rate varied from
the U.S.  statutory  rate  primarily  due to changes in the deferred  income tax
valuation  allowance related to the Company's tax attributes with respect to the
"more-likely-than-not" recognition criteria during those periods. See Note 10 to
the Consolidated Financial Statements.

     The  Company  periodically  reviews  its  deferred  income  tax  assets  to
determine  if future  realization  is more  likely  than not.  During  the first
quarter of 2005, based on the Company's recent history of U.S. income,  its near
term  outlook and the effect of its change in method of  inventory  costing from
the LIFO cost method to the specific identification cost method for U.S. federal
income tax  purposes  (see Note 1), the  Company  changed  its  estimate  of its
ability to utilize the tax  benefits of its U.S. NOL  carryforwards,  AMT credit
carryforwards  and other net deductible  temporary  differences  (other than the
majority of the Company's capital loss carryforwards). Consequently, the Company
determined  that its net  deferred  income tax asset  related  to such U.S.  tax
attributes  and  other  net  deductible  temporary  differences  now  meets  the
"more-likely-than-not"  recognition criteria.  Accordingly, the Company reversed
$22.6  million of the valuation  allowance  attributable  to such U.S.  deferred
income tax asset in the first half of 2005 ($5.3 million in the second  quarter)
and the Company will reverse the remaining U.S. valuation allowance attributable
to its U.S. net deferred  income tax asset of $14.2 million during the final two
quarters of 2005 in accordance  with the GAAP  requirements  of  accounting  for
income taxes at interim dates.

     During the first quarter of 2005,  based on the Company's recent history of
U.K.  income,  its near term outlook and its historic  U.K.  profitability,  the
Company also  changed its estimate of its ability to utilize its net  deductible
temporary  differences and other tax attributes  related to the U.K.,  primarily
comprised of (i) the future  benefits  associated  with the reversal of its U.K.
minimum pension liability deferred income tax asset and (ii) the benefits of its
U.K.  NOL  carryforward.  Consequently,  the  Company  determined  that  its net
deferred  income  tax asset in the U.K.  now  meets  the  "more-likely-than-not"
recognition  criteria.  Accordingly,  the Company  reversed $13.0 million of the
valuation allowance  attributable to such deferred income tax asset in the first
half of 2005 ($0.4  million in the second  quarter) and the Company will reverse
the  remaining  U.K.  valuation  allowance of $0.4 million  during the final two
quarters of 2005 in accordance  with the GAAP  requirements  of  accounting  for
income taxes at interim dates.

     In October  2004,  the American  Jobs Creation Act of 2004 was enacted into
law.  The new law  provides for a special 85%  deduction  for certain  dividends
received from controlled foreign  corporations in 2005. In the second quarter of
2005, the Company  completed its evaluation of this new provision and determined
that it would  benefit  from  the  special  dividend  received  deduction.  As a
consequence,  the  Company  plans to  repatriate  approximately  $19  million of
earnings from its European  subsidiaries  in the third quarter of 2005. The $1.0
million related tax impact of this repatriation has been recorded as tax expense
in the second quarter in accordance with the requirements of FASB Staff Position
No. 109-2.  However, the Company has not provided for U.S. deferred income taxes
or foreign  withholding taxes on basis differences in its non-U.S.  subsidiaries
that  result  primarily  from  undistributed  earnings  the  Company  intends to
reinvest  indefinitely.  Determination  of the deferred  income tax liability on
these basis  differences is not practicable  because such liability,  if any, is
dependent on circumstances existing if and when remittance occurs.

                                     - 26 -

<PAGE>


     Dividends on Series A Preferred  Stock.  Shares of the  Company's  Series A
Preferred  Stock are  convertible,  at any  time,  at the  option of the  holder
thereof,  into one and two-thirds shares of the Company's common stock,  subject
to adjustment in certain events. The Series A Preferred Stock is not mandatorily
redeemable,  but is  redeemable  at the  option  of the  Company  under  certain
circumstances.  When,  as and if declared by the  Company's  board of directors,
holders of the Series A Preferred Stock are entitled to receive  cumulative cash
dividends at the rate of 6.75% of the $50 per share  liquidation  preference per
annum per share  (equivalent  to $3.375 per annum per share).  The Company  paid
dividends of $3.3 million and $6.7 million during the three and six months ended
June 30, 2005, respectively,  to holders of the Series A Preferred Stock. During
July  2005,  certain  holders  of the  Series A  Preferred  Stock  converted  an
aggregate of 55,221 shares of the Series A Preferred Stock into 92,034 shares of
TIMET's common stock.

     European  operations.  The Company has  substantial  operations  located in
Europe,  principally  the  U.K.,  France  and  Italy.  Approximately  42% of the
Company's sales  originated in Europe for the six months ended June 30, 2005, of
which  approximately  61% were  denominated in the British pound sterling or the
euro.  Certain  purchases  of raw  materials,  principally  titanium  sponge and
alloys, for the Company's  European  operations are denominated in U.S. dollars,
while  labor  and other  production  costs are  primarily  denominated  in local
currencies. The functional currencies of the Company's European subsidiaries are
those of their respective  countries,  and the European subsidiaries are subject
to exchange rate  fluctuations  that may impact reported earnings and may affect
the  comparability  of  period-to-period  operating  results.  Borrowings of the
Company's  European   operations  may  be  in  U.S.  dollars  or  in  functional
currencies.  The Company's  export sales from the U.S. are  denominated  in U.S.
dollars and are not subject to currency exchange rate fluctuations.

     The  Company  does  not  use  currency  contracts  to  hedge  its  currency
exposures.  At June 30, 2005, consolidated assets and liabilities denominated in
currencies other than functional currencies were approximately $58.5 million and
$37.5 million, respectively,  consisting primarily of U.S. dollar cash, accounts
receivable and accounts payable.

     VALTIMET has entered into certain  derivative  financial  instruments  that
qualify  as cash  flow  hedges  under  GAAP.  The  Company's  pro-rata  share of
VALTIMET's  unrealized  net gains on such  derivative  financial  instruments is
included as a component of other comprehensive income.

     Outlook.  The  "Outlook"  section  contains  a  number  of  forward-looking
statements,  all  of  which  are  based,  unless  otherwise  noted,  on  current
expectations  and  exclude the effect of  potential  future  charges  related to
restructurings,  asset impairments,  valuation allowances, changes in accounting
principles  and  similar  items.  Undue  reliance  should not be placed on these
statements,  as  more  fully  discussed  in  the  "Forward-Looking  Information"
statement of this Quarterly Report.  Actual results may differ  materially.  See
also  Notes to the  Consolidated  Financial  Statements  regarding  commitments,
contingencies, legal matters, environmental matters and other matters, including
new accounting  principles,  which could materially  affect the Company's future
business, results of operations, financial position and liquidity.

     Over the past several  quarters,  the Company has seen the  availability of
raw  materials  tighten,  and,  consequently,  the prices for such raw materials
increased  generally  over that  period.  The Company  currently  expects that a
shortage in raw materials is likely to continue  throughout  2005 and into 2006,
which could limit the Company's  ability to produce enough titanium  products to
fully meet  customer  demand.  In  addition,  the Company has certain  long-term
agreements that limit the Company's  ability to pass on all of its increased raw
material costs to its customers.

                                     - 27 -

<PAGE>

     In July 2005, The Airline Monitor, a leading aerospace publication,  issued
its semi-annual forecast for commercial aircraft deliveries.  Beginning in 2006,
this new forecast increases its estimate of large commercial aircraft deliveries
over the next five years by 460 planes,  including 55 additional Boeing 787 wide
bodies  (which  currently  require  a higher  percentage  of  titanium  in their
airframes,  engines and other parts than any other  commercial  aircraft).  This
updated forecast  supports the Company's belief that the titanium industry is in
the early stages of the business cycle and that the current  uptrend will likely
continue through 2006 and beyond.

     During  the third  quarter  of 2004,  the  Company  modified  its method of
calculating   its  backlog  to  include   purchase   orders  under   consignment
relationships.  The Company  believes  inclusion of these orders provides a more
accurate  reflection  of the  Company's  overall  backlog.  Using  the  modified
methodology for all periods,  the Company's  backlog at the end of June 2005 was
$580 million,  a $90 million (18%) increase over the $490 million backlog at the
end of March  2005  and a $260  million  (81%)  increase  over the $320  million
backlog at the end of June 2004.

     Consistent with the guidance released on July 19, 2005, the Company expects
its full year 2005 sales revenue to range from $730 million to $760 million,  an
increase of $30 million over the guidance  provided in the  Company's  March 31,
2005 Quarterly  Report.  At the upper end of the range, 2005 sales revenue would
be a record high for TIMET.  This  increase is primarily  due to higher  average
selling prices projected for both melted and mill products.  As compared to full
year 2004, the Company currently expects 2005 average selling prices to increase
40% to 45% for melted  products  and 25% to 30% for mill  products.  The Company
expects  full year 2005  product  shipments  to  increase  5% to 10% for  melted
products and 14% to 19% for mill products, as compared to full year 2004.

     The  Company's  cost of sales is affected by a number of factors  including
customer and product mix,  material yields,  plant operating rates, raw material
costs, labor and energy costs. Raw material costs,  which include sponge,  scrap
and alloys,  represent the largest portion of the Company's  manufacturing  cost
structure. As previously reported, scrap and certain alloy prices have increased
significantly  from year ago prices, and increased energy costs also continue to
have a negative impact on gross margin.  However, the Company has recently begun
to see a softening of such raw material costs.

     The Company currently expects production volumes to continue to increase in
2005, with overall capacity  utilization expected to approximate 80% in 2005 (as
compared to 75% in 2004).  However,  practical capacity utilization measures can
vary significantly based on product mix.

     Selling,  general,  administrative and development expenses for 2005 should
approximate $52 million,  or 6.8% to 7.1% of net sales,  which is an increase of
approximately   $1   million   from   previous   guidance   related   to  higher
performance-based  employee incentive  compensation payments expected to be made
as a result of our higher than previously expected operating income.

     The Company  currently  anticipates that it will receive orders from Boeing
for about 3.0 million  pounds of product  during 2005. At this  projected  order
level,  the  Company  expects to  recognize  about $17 million of income in 2005
under the Boeing LTA's take-or-pay provisions.

                                     - 28 -

<PAGE>


     Consistent with the guidance released on July 19, 2005, the Company expects
its 2005  operating  income  to range  from $123  million  to $138  million,  an
increase of $53 million over the guidance  provided in the  Company's  March 31,
2005  Quarterly  Report.  This increase  primarily  relates to (i) the Company's
projected increase in sales revenue and (ii) lower than previously  expected raw
material costs.

     Dividends on the Company's Series A Preferred Stock should  approximate $13
million in 2005.  Consistent  with the guidance  released on July 19, 2005,  the
Company expects its 2005 net income attributable to common stockholders to range
from $117 million and $132 million, an increase of $37 million over the guidance
provided in the Company's  March 31, 2005  Quarterly  Report.  The projected net
income attributable to common  stockholders  includes (i) a $9.6 million (net of
taxes)  non-operating  gain on the sale of certain  property  recognized  in the
second quarter and (ii) the aggregate $50.2 million income tax benefits  related
to reversal of the Company's U.S. and U.K.  deferred  income tax asset valuation
allowances discussed above.

     The Company  currently  expects to  generate  $50 million to $60 million in
cash flow from operations  during 2005, which is a $45 million increase from the
guidance  provided in the Company's March 31, 2005 Quarterly  Report,  primarily
due to the Company's  improved forecast for 2005.  Depreciation and amortization
should  approximate $32 million in 2005. In May 2005, the Company  announced its
plans to expand its existing titanium sponge facility in Henderson, Nevada. This
expansion,  which the Company  expects to complete by the first quarter of 2007,
will provide the capacity to produce an  additional  4,000 metric tons of sponge
annually,  an  increase  of  approximately  42% over  current  Henderson  sponge
production capacity levels. The Company currently estimates the capital cost for
the project will approximate $38 million.  Capital  expenditures during 2005 are
now  expected to  approximate  $78  million,  an  increase  of $10 million  over
previous  guidance  principally  due to increased  costs to construct  the water
conservation  facility  at the  Company's  Henderson,  Nevada  plant.  Projected
capital  expenditures during 2005 also include $25 million related to the sponge
facility expansion.

     The Company  currently  expects to make  contributions  of approximately $9
million to its defined  benefit  pension plans during 2005, and expects  pension
expense to approximate $8 million in 2005.

     Non-GAAP  financial  measures.  In an  effort  to  provide  investors  with
information  in addition to the Company's  results as  determined  by GAAP,  the
Company has  provided  the  following  non-GAAP  financial  disclosures  that it
believes may provide useful information to investors:

     o    The  Company  discloses  percentage  changes  in its  melted  and mill
          product  selling prices in U.S.  dollars,  which have been adjusted to
          exclude the effects of changes in product  mix.  The Company  believes
          such disclosure  provides useful  information to investors by allowing
          them to analyze such changes  without the impact of changes in product
          mix, thereby facilitating period-to-period comparisons of the relative
          changes in average  selling  prices.  Depending on the  composition of
          changes in  product  mix,  the  percentage  change in  selling  prices
          excluding  the effect of changes in product mix can be higher or lower
          than such  percentage  change  would be using the actual  product  mix
          prevailing during the respective periods; and

                                     - 29 -

<PAGE>


     o    In  addition  to  disclosing  percentage  changes in its mill  product
          selling  prices  adjusted to exclude the effects of changes in product
          mix, the Company also  discloses  such  percentage  changes in billing
          currencies, which have been further adjusted to exclude the effects of
          changes in foreign currency  exchange rates. The Company believes such
          disclosure  provides useful  information to investors by allowing them
          to  analyze  such  changes  without  the  impact of changes in foreign
          currency  exchange  rates,   thereby   facilitating   period-to-period
          comparisons of the relative  changes in average  selling prices in the
          various actual billing  currencies.  Generally,  when the U.S.  dollar
          strengthens (weakens) against other currencies,  the percentage change
          in selling  prices in billing  currencies  will be higher (lower) than
          such   percentage   changes  would  be  using  actual  exchange  rates
          prevailing during the respective periods.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company's  consolidated  cash flows for the six months  ended June 30,
2005 and 2004 are presented  below. The following  discussion  should be read in
conjunction  with the  Company's  Consolidated  Financial  Statements  and Notes
thereto.

<TABLE>
                                                                                 Six months ended June 30,
                                                                        --------------------------------------------
                                                                               2005                    2004
                                                                        --------------------    --------------------
                                                                                      (In thousands)
<S>                                                                     <C>                     <C>
Cash provided (used) by:
   Operating activities                                                 $          17,900       $         (2,138)
   Investing activities                                                           (35,246)               (23,247)
   Financing activities                                                            15,778                   (137)
                                                                        --------------------    --------------------

   Net cash used by operating, investing and
     financing activities                                               $          (1,568)      $        (25,522)
                                                                        ====================    ====================
</TABLE>

     Operating  activities.  The titanium  industry  historically  has derived a
substantial portion of its business from the aerospace  industry.  The aerospace
industry is cyclical,  and changes in economic  conditions  within the aerospace
industry  significantly  impact the Company's earnings and operating cash flows.
Cash flow from  operations  is  considered  a  primary  source of the  Company's
liquidity.  Changes in titanium pricing,  production volume and customer demand,
among other things, could significantly affect the Company's liquidity.

     Certain items included in the determination of net income have an impact on
cash flows from operating  activities,  but the impact of such items on cash may
differ from their impact on net income.  For example,  pension  expense and OPEB
expense  will  generally  differ  from the  outflows of cash for payment of such
benefits.  In addition,  relative  changes in assets and  liabilities  generally
result from the timing of production, sales and purchases. Such relative changes
can  significantly  impact the  comparability  of cash flow from operations from
period to period,  as the income  statement  impact of such items may occur in a
different period than that in which the underlying cash transaction  occurs. For
example,  raw materials may be purchased in one period, but the cash payment for
such raw materials may occur in a subsequent period. Similarly, inventory may be
sold in one period,  but the cash  collection of the  receivable  may occur in a
subsequent period.

     Net  income was $78.3  million  for the six  months  ended  June 30,  2005,
compared to net income of $2.2 million for the six months ended June 30, 2004.

                                     - 30 -

<PAGE>

     Accounts  receivable  increased  during  the  first  half of 2005  and 2004
primarily as a result of increased sales. Inventories increased during the first
half of 2005 and 2004 as a result of increased  run rates and related  inventory
build in order to meet  expected  customer  demand,  as well as the  effects  of
increased raw material costs.

     Changes in accounts payable and accrued  liabilities  reflect,  among other
things,  the timing of (i) payments to suppliers  of titanium  sponge,  titanium
scrap and other raw  material  purchases  and (ii)  changes to accrued  employee
benefits,  including  performance-based employee incentive compensation.  During
the first six months of 2004, accrued  liabilities also decreased due to payment
of the $2.8 million final  installment  related to  termination of the Company's
prior agreement with Wyman-Gordon Company.

     The  increase in customer  advances  during the first half of 2005 and 2004
primarily  reflects the Company's receipt of a $27.9 million advance from Boeing
in each of  January  2005 and  2004,  partially  offset  by the  application  of
customer  purchases.  Under the terms of the Boeing LTA,  in years 2002  through
2007,  Boeing  advances  TIMET $28.5 million  annually,  less $3.80 per pound of
titanium  product  purchased  from  TIMET by Boeing  subcontractors  during  the
preceding year.

     Investing activities. The Company's capital expenditures were $34.9 million
for the six  months  ended  June 30,  2005,  compared  to $6.7  million  for the
comparable  period  in  2004,  principally  for  replacement  of  machinery  and
equipment  and for capacity  maintenance.  The 2005 amount also  includes  $18.5
million  related to  construction  of the water  conservation  facility and $3.7
million  related to the  expansion of the  Company's  sponge plant in Henderson,
Nevada.  During  the first six months of 2005,  the  Company  purchased  146,900
shares of CompX  Class A common  stock for $2.2  million.  During  the first six
months of 2004, the Company  purchased  1,365,510 shares of CompX Class A common
stock for $14.0 million and 221,100 shares of NL Industries,  Inc.  common stock
for $2.5 million. See Note 3 to the Consolidated Financial Statements.

     Financing  activities.  Cash provided  during the six months ended June 30,
2005 related primarily to the Company's net borrowings of $23.5 million, used in
part to (i) fund construction of the water conservation  facility as well as the
Company's  expansion of its sponge plant and (ii)  support the  accumulation  of
inventory in order to meet expected  customer demand.  The Company also received
$1.1  million  from the  issuance  of common  stock  related to the  exercise of
certain  employee stock options during the 2005 period.  These cash inflows were
partially  offset by the  Company's  $6.6  million  payment of  dividends on the
Company's  Series A  Preferred  Stock.  In  addition,  the  Company's  70%-owned
subsidiary,  TIMET  Savoie,  S.A.  made  dividend  payments to its 30%  minority
partner  of $2.2  million  during the  second  quarter of 2005 and $0.7  million
during the second quarter 2004.  The Company had zero net borrowings  during the
six months ended June 30, 2004.

                                     - 31 -

<PAGE>


     Borrowing  arrangements.  During the second  quarter of 2005,  the  Company
amended its U.S. credit facility to increase its maximum  authorized  borrowings
from $105 million to $125  million.  In addition,  the amended  credit  facility
reduced the excess availability  requirement related to the payment of dividends
on the  Company's  Series A  Preferred  Stock and  distributions  on the Capital
Trust's BUCS from $25 million to $10 million.  During the first quarter of 2004,
the Company amended its U.S.  credit facility to, among other things,  allow the
Company the flexibility to remove the equipment component from the determination
of the  Company's  borrowing  availability  in order to  avoid  the  costs of an
appraisal.  Interest  currently  accrues at rates based on LIBOR plus 2% or bank
prime rate plus 0.5%.  Borrowings are collateralized by substantially all of the
Company's U.S. assets.  The Company was in compliance with all covenants for all
periods during the six months ended June 30, 2005 and 2004. As of June 30, 2005,
the Company had outstanding  borrowings under the U.S. credit agreement of $66.1
million, and excess availability was approximately $55 million.

     During the second  quarter of 2005,  the  Company's  subsidiary,  TIMET UK,
terminated its previous credit  agreement and entered into a new working capital
credit  facility  that  expires  on April 30,  2008.  Under the new U.K.  credit
facility,  TIMET  UK  may  borrow  up  to  (pound)22.5  million,  subject  to  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and property, plant and equipment.  Borrowings under the U.K. facility
can be in various  currencies,  including U.S. dollars,  British pounds sterling
and euros and are  collateralized  by  substantially  all of TIMET UK's  assets.
Interest on  outstanding  borrowings  generally  accrues at rates that vary from
1.125% to 1.375%  above the  lender's  published  base rate.  The U.K.  facility
agreement  also contains  financial  ratios and  covenants  customary in lending
transactions of this type, including a minimum net worth covenant.  TIMET UK was
in compliance  with all  covenants  for all periods  during the six months ended
June 30, 2005 and 2004. As of June 30, 2005, the Company had no borrowings under
the U.K.  facility,  and unused  borrowing  availability was  approximately  $40
million.

     The Company also has  overdraft  and other credit  facilities at certain of
its other European  subsidiaries.  These  facilities  accrue interest at various
rates  and are  payable  on  demand.  As of  June  30,  2005,  the  Company  had
outstanding  borrowings  of $0.6  million  under  these  facilities,  and unused
borrowing availability was approximately $15 million.

     No dividends were paid by TIMET on its common stock during the three months
ended June 30, 2005 or 2004.  During the quarter ended June 30, 2005, TIMET paid
$3.3 million in dividends on its Series A Preferred Stock.

     Legal and environmental  matters. See Note 12 to the Consolidated Financial
Statements for discussion of legal and  environmental  matters,  commitments and
contingencies.

     Other.  The Company  periodically  evaluates  its  liquidity  requirements,
capital needs and availability of resources in view of, among other things,  its
alternative  uses of capital,  debt service  requirements,  the cost of debt and
equity capital and estimated  future  operating cash flows.  As a result of this
process, the Company has in the past, or in light of its current outlook, may in
the future,  seek to raise additional  capital,  modify its common and preferred
dividend  policies,   restructure  ownership  interests,   incur,  refinance  or
restructure indebtedness,  repurchase shares of common stock, purchase or redeem
BUCS or Series A Preferred  Stock,  sell assets,  or take a combination  of such
steps or other steps to increase or manage its liquidity and capital  resources.
In the normal course of business, the Company investigates, evaluates, discusses
and engages in  acquisition,  joint venture,  strategic  relationship  and other
business  combination  opportunities in the titanium,  specialty metal and other
industries.   In  the  event  of  any  future   acquisition   or  joint  venture
opportunities,  the Company may consider using then-available liquidity, issuing
equity securities or incurring additional indebtedness.

                                     - 32 -

<PAGE>

     Corporations  that may be deemed to be controlled by or affiliated with Mr.
Simmons sometimes engage in (i) intercorporate  transactions such as guarantees,
management and expense  sharing  arrangements,  shared fee  arrangements,  joint
ventures,  partnerships,  loans, options, advances of funds on open account, and
sales,  leases and  exchanges  of assets,  including  securities  issued by both
related and  unrelated  parties,  and (ii)  common  investment  and  acquisition
strategies,   business   combinations,    reorganizations,    recapitalizations,
securities  repurchases,  and  purchases and sales (and other  acquisitions  and
dispositions)  of  subsidiaries,   divisions  or  other  business  units,  which
transactions  have involved both related and unrelated parties and have included
transactions  which  resulted  in the  acquisition  by one  related  party  of a
publicly-held  minority equity  interest in another  related party.  The Company
continuously considers, reviews and evaluates such transactions, and understands
that  Contran,  Valhi and related  entities  consider,  review and evaluate such
transactions.  Depending  upon  the  business,  tax and  other  objectives  then
relevant,  it is possible  that the Company might be a party to one or more such
transactions in the future.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For a  discussion  of the  Company's  market  risks,  refer to the Item 7A,
"Quantitative and Qualitative Disclosures About Market Risk," in the 2004 Annual
Report.  There have been no material  changes to the  information  provided that
would require  additional  information with respect to the six months ended June
30, 2005.

Item 4. CONTROLS AND PROCEDURES

     Evaluation of disclosure  controls and procedures.  The Company maintains a
system of disclosure controls and procedures.  The term "disclosure controls and
procedures,"  as defined by  regulations  of the SEC,  means  controls and other
procedures that are designed to ensure that information required to be disclosed
in the reports that the Company files or submits to the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange  Act"), is recorded,  processed,
summarized  and reported,  within the time periods  specified in the SEC's rules
and forms.  Disclosure  controls and  procedures  include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by the  Company  in the  reports  that it files or submits to the SEC
under  the  Exchange  Act is  accumulated  and  communicated  to  the  Company's
management,   including  its  principal  executive  officer  and  its  principal
financial officer,  or persons  performing similar functions,  as appropriate to
allow timely  decisions to be made  regarding  required  disclosure.  Each of J.
Landis  Martin,  the  Company's  Chairman  of the  Board,  President  and  Chief
Executive  Officer,  and Bruce P. Inglis, the Company's Vice President - Finance
and Corporate  Controller,  have evaluated the Company's disclosure controls and
procedures as of June 30, 2005.  Based upon their  evaluation,  these  executive
officers have  concluded that the Company's  disclosure  controls and procedures
are effective as of the date of such evaluation.

                                     - 33 -

<PAGE>


     Internal  control over  financial  reporting.  The Company  also  maintains
internal  control over  financial  reporting.  The term  "internal  control over
financial  reporting,"  as defined by  regulations  of the SEC,  means a process
designed by, or under the supervision of, the Company's  principal executive and
principal  financial  officers,  or persons performing  similar  functions,  and
effected by the Company's board of directors, management and other personnel, to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with GAAP, and includes those policies and procedures that:

     o    Pertain  to the  maintenance  of  records  that in  reasonable  detail
          accurately and fairly reflect the transactions and dispositions of the
          assets of the Company;

     o    Provide  reasonable   assurance  that  transactions  are  recorded  as
          necessary to permit preparation of financial  statements in accordance
          with GAAP, and that receipts and expenditures of the Company are being
          made  only  in  accordance  with   authorizations  of  management  and
          directors of the Company; and

     o    Provide reasonable  assurance regarding prevention or timely detection
          of  unauthorized  acquisition,  use or  disposition  of the  Company's
          assets that could have a material effect on the Company's Consolidated
          Financial Statements.

     As permitted by the SEC, the Company's  assessment of internal control over
financial  reporting  excludes (i) internal control over financial  reporting of
its equity method  investees and (ii) internal  control over the  preparation of
the Company's financial statement schedules required by Article 12 of Regulation
S-X.  However,  the  Company's  assessment  of internal  control over  financial
reporting with respect to the Company's  equity method investees did include its
controls over the recording of amounts related to the Company's investments that
are recorded in its Consolidated  Financial Statements,  including controls over
the  selection  of  accounting  methods  for  the  Company's  investments,   the
recognition  of  equity  method  earnings  and  losses  and  the  determination,
valuation and recording of the Company's investment account balances.

     Changes in internal  control over  financial  reporting.  There has been no
change to the Company's  internal  control over financial  reporting  during the
quarter  ended June 30,  2005 that has  materially  affected,  or is  reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

                                     - 34 -

<PAGE>


PART II. - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

     Reference  is made to Note  12 of the  Consolidated  Financial  Statements,
which information is incorporated herein by reference, and to the Company's 2004
Annual Report for descriptions of certain previously reported legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its Annual  Meeting of  Stockholders  on May 23, 2005, for
the following purposes:

     1.   To elect eight  directors  to serve  until the 2006 Annual  Meeting of
          Stockholders   and  until  their   successors  are  duly  elected  and
          qualified.  All nominees for director  were elected with the following
          vote:

                 Director                Votes For            Votes Withheld
          ------------------------   ------------------   ----------------------
          Norman N. Green                15,005,487              128,915
          Gary C. Hutchison              15,014,762              119,640
          J. Landis Martin               14,562,569              571,833
          Albert W. Niemi, Jr.           15,018,903              115,499
          Glenn R. Simmons               14,580,940              553,462
          Harold C. Simmons              14,550,282              584,120
          Steven L. Watson               14,587,185              547,217
          Paul J. Zucconi                15,024,332              110,070

     2.   To consider and vote on the Titanium  Metals  Corporation  Amended and
          Restated  2005 Profit  Sharing  Plan.  The plan was approved  with the
          following vote:

<TABLE>

                Votes For              Votes Against          Votes Abstained          Broker Non-Vote
         -------------------------   ------------------   ----------------------   -----------------------
<S>             <C>                         <C>                  <C>                      <C>
                11,026,486                  121,789              295,674                  3,690,453

</TABLE>

                                     - 35 -

<PAGE>


Item 6. EXHIBITS

     10.1 Amendment No. 5 to Loan and Security  Agreement by and among  Wachovia
          Bank, National Association,  successor by merger to Congress Financial
          Corporation  (Southwest) as Lender and Titanium Metals Corporation and
          Titanium Hearth Technologies, Inc. as borrowers, dated June 30, 2005.

     10.2 Bank of Scotland Working Capital Facility of (pound)22,500,000/Payment
          Systems, incorporated by reference to Exhibit 10.1 to the Registrant's
          Current Report on Form 8-K filed with the SEC on May 23, 2005.

     31.1 Certification  pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
          2002.

     31.2 Certification  pursuant  to Section 302 of the  Sarbanes-Oxley  Act of
          2002.

     32.1 Certification  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of
          2002.


     Note:The Company  has  retained a signed  original  of any  exhibit  listed
          above that contains signatures,  and the Company will provide any such
          exhibit to the SEC or its staff upon request.  Such request  should be
          directed to the attention of the Company's  Corporate Secretary at the
          Company's  corporate  offices  located at 1999  Broadway,  Suite 4300,
          Denver, Colorado 80202.

                                     - 36 -

<PAGE>


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 thereunto duly authorized.


                                          TITANIUM METALS CORPORATION
                                ------------------------------------------------



Date: August 2, 2005            By  /s/ J. Landis Martin
                                    --------------------------------------------
                                    J. Landis Martin
                                    Chairman of the Board, President and
                                      Chief Executive Officer


Date: August 2, 2005            By  /s/ Bruce P. Inglis
                                    --------------------------------------------
                                    Bruce P. Inglis
                                    Vice President - Finance and Corporate
                                      Controller



                                     - 37 -