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 March 31, 2004
                                                 --------------

                                       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      No  X
                                     ---     ---


Number of shares of common stock outstanding on May 2, 2004: 3,179,942

<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 supply of
raw materials and services,  changes in raw material 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  Company's  ability to achieve  reductions  in its cost  structure 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 - March 31, 2004 (unaudited)
                and December 31, 2003                                        2

              Consolidated Statements of Operations - Three months
                ended March 31, 2004 and 2003 (unaudited)                    4

              Consolidated Statements of Comprehensive Income (Loss) -
                Three months ended March 31, 2004 and 2003 (unaudited)       5

              Consolidated Statements of Cash Flows - Three months ended
                March 31, 2004 and 2003 (unaudited)                          6

              Consolidated Statement of Changes in Stockholders' Equity -
                Three months ended March 31, 2004 (unaudited)                8

              Notes to Consolidated Financial Statements (unaudited)         9

     Item 2.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations                         20

     Item 3.  Quantitative and Qualitative Disclosures about Market Risk    29

     Item 4.  Controls and Procedures                                       29

PART II. OTHER INFORMATION

     Item 1.  Legal Proceedings                                             31

     Item 6.  Exhibits and Reports on Form 8-K                              31



                                      - 1 -

<PAGE>


                           TITANIUM METALS CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>

                                                                                 March 31,             December 31,
                                                                                   2004                    2003
                                                                            --------------------     ------------------
ASSETS                                                                           (unaudited)

<S>                                                                         <C>                      <C>
Current assets:
   Cash and cash equivalents                                                $          32,779        $        35,040
   Restricted cash and cash equivalents                                                 2,248                  2,248
   Accounts and other receivables, less allowance
     of $1,859 and $2,347                                                              80,332                 67,432
   Refundable income taxes                                                              1,538                  2,155
   Inventories                                                                        175,976                165,721
   Prepaid expenses and other                                                           2,536                  2,604
   Deferred income taxes                                                                  604                    778
                                                                            --------------------     ------------------

       Total current assets                                                           296,013                275,978

Marketable securities                                                                  17,224                      -
Investment in joint ventures                                                           23,384                 22,469
Investment in common securities of TIMET Capital Trust I                                6,907                  6,794
Property and equipment, net                                                           236,537                239,182
Intangible assets, net                                                                  5,938                  6,294
Other                                                                                  17,287                 16,692
                                                                            --------------------     ------------------

       Total assets                                                         $         603,290        $       567,409
                                                                            ====================     ==================


</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                      - 2 -

<PAGE>


                           TITANIUM METALS CORPORATION

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                      (In thousands, except per share data)

<TABLE>


                                                                                  March 31,              December 31,
LIABILITIES, MINORITY INTEREST AND                                                   2004                    2003
STOCKHOLDERS' EQUITY                                                         ---------------------    -------------------
                                                                                 (unaudited)
<S>                                                                          <C>                      <C>
Current liabilities:
   Current maturities of capital lease obligations                           $             176        $            524
   Accounts payable                                                                     30,366                  29,200
   Accrued liabilities                                                                  62,522                  45,163
   Customer advances                                                                    31,494                   3,356
   Other                                                                                   418                     262
                                                                             ---------------------    -------------------

       Total current liabilities                                                       124,976                  78,505

Capital lease obligations                                                               10,084                   9,766
Accrued OPEB cost                                                                       13,856                  13,661
Accrued pension cost                                                                    66,615                  62,366
Accrued environmental cost                                                               3,230                   3,930
Deferred income taxes                                                                      491                     637
Accrued interest on debt payable to TIMET Capital Trust I                                    -                  19,003
Debt payable to TIMET Capital Trust I                                                  207,465                 207,465
Other                                                                                    1,844                   2,188
                                                                             ---------------------    -------------------

       Total liabilities                                                               428,561                 397,521
                                                                             ---------------------    -------------------

Minority interest                                                                       11,301                  11,131
                                                                             ---------------------    -------------------

Stockholders' equity:
   Preferred stock, $.01 par value; 100 shares authorized,
     none issued                                                                             -                       -
   Common stock, $.01 par value; 9,900 shares authorized,
     3,189 and 3,190 shares issued                                                          32                      32
   Additional paid-in capital                                                          350,632                 350,643
   Accumulated deficit                                                                (142,082)               (140,428)
   Accumulated other comprehensive loss                                                (43,910)                (50,226)
   Treasury stock, at cost (9 shares)                                                   (1,208)                 (1,208)
   Deferred compensation                                                                   (36)                    (56)
                                                                             ---------------------    -------------------
       Total stockholders' equity                                                      163,428                 158,757
                                                                             ---------------------    -------------------

       Total liabilities and stockholders' equity                            $         603,290        $        567,409
                                                                             =====================    ===================

Commitments and contingencies (Note 13)


</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 March 31,
                                                                            ------------------------------------------
                                                                                   2004                   2003
                                                                            -------------------    -------------------

<S>                                                                         <C>                    <C>
Net sales                                                                   $       120,488        $        99,294
Cost of sales                                                                       108,132                 98,276
                                                                            -------------------    -------------------

  Gross margin                                                                       12,356                  1,018

Selling, general, administrative and development expense                              9,517                  9,895
Equity in (losses) earnings of joint ventures                                           (83)                   185
Other income (expense), net                                                              74                    628
                                                                            -------------------    -------------------

  Operating income (loss)                                                             2,830                 (8,064)

Interest expense                                                                      4,309                  4,200
Other non-operating income (expense), net                                               738                   (415)
                                                                            -------------------    -------------------

  Loss before income taxes, minority interest and
      cumulative effect of change in accounting principle                              (741)               (12,679)

Income tax expense                                                                      523                    457
Minority interest, net of tax                                                           390                    263
                                                                            -------------------    -------------------

  Loss before cumulative effect of change in
      accounting principle                                                           (1,654)               (13,399)

Cumulative effect of change in accounting principle                                       -                   (191)
                                                                            -------------------    -------------------

  Net loss                                                                  $        (1,654)       $       (13,590)
                                                                            ===================    ===================

Basic and diluted loss per share:
  Before cumulative effect of change in
      accounting principle                                                  $         (0.52)       $         (4.23)

  Cumulative effect of change in accounting principle                                     -                  (0.06)
                                                                            -------------------    -------------------

Basic and diluted loss per share                                            $         (0.52)       $         (4.29)
                                                                            ===================    ===================

Weighted average shares outstanding                                                   3,173                  3,165


</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 March 31,
                                                                          ------------------------------------------
                                                                                 2004                   2003
                                                                          -------------------    -------------------

<S>                                                                       <C>                    <C>
Net loss                                                                  $        (1,654)       $       (13,590)
                                                                          -------------------    -------------------

Other comprehensive income (loss):

   Currency translation adjustment                                                  1,616                    (91)

   Unrealized gains on marketable securities                                        4,450                      -

   TIMET's share of VALTIMET's unrealized net gains on
     derivative financial instruments qualifying as cash flow
     hedges                                                                           250                      -
                                                                          -------------------    -------------------

     Total other comprehensive income (loss)                                        6,316                    (91)
                                                                          -------------------    -------------------

   Comprehensive income (loss)                                            $         4,662        $       (13,681)
                                                                          ===================    ===================

</TABLE>


           See accompanying Notes to Consolidated Financial Statements
                                      - 5 -


<PAGE>


                           TITANIUM METALS CORPORATION

                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                                 (In thousands)

<TABLE>


                                                                                   Three months ended March 31,
                                                                              ----------------------------------------
                                                                                     2004                 2003
                                                                              -------------------   ------------------

<S>                                                                           <C>                   <C>
Cash flows from operating activities:
   Net loss                                                                   $       (1,654)       $      (13,590)
   Depreciation and amortization                                                       8,483                 9,547
   Cumulative effect of change in accounting principle                                     -                   191
   Equity in earnings of joint ventures, net of distributions                             83                  (135)
   Equity in earnings of common securities of TIMET
     Capital Trust I, net of distributions                                              (113)                 (105)
   Deferred income taxes                                                                  13                   113
   Minority interest, net of tax                                                         390                   263
   Other, net                                                                           (525)                  486
   Change in assets and liabilities:
     Receivables                                                                     (12,275)              (16,286)
     Inventories                                                                      (9,252)               13,906
     Prepaid expenses and other                                                           94                    30
     Accounts payable and accrued liabilities                                         (4,427)                2,980
     Customer advances                                                                28,157                26,656
     Income taxes                                                                        581                  (321)
     Accrued OPEB and pension costs                                                    2,180                  (120)
     Accrued interest on debt payable to TIMET Capital Trust I                         3,751                 3,512
     Other, net                                                                       (1,309)                 (304)
                                                                              -------------------   ------------------
       Net cash provided by operating activities                                      14,177                26,823
                                                                              -------------------   ------------------

Cash flows from investing activities:
   Capital expenditures                                                               (3,280)               (1,487)
   Purchase of marketable securities                                                 (12,774)                    -
                                                                              -------------------   ------------------
       Net cash used by investing activities                                         (16,054)               (1,487)
                                                                              -------------------   ------------------

Cash flows from financing activities:
   Indebtedness:
     Borrowings                                                                        9,575                58,060
     Repayments                                                                       (9,575)              (62,683)
   Other, net                                                                           (403)                 (493)
                                                                              -------------------   ------------------
       Net cash used by financing activities                                            (403)               (5,116)
                                                                              -------------------   ------------------

       Net cash (used) provided by operating,
         investing and financing activities                                   $       (2,280)       $       20,220
                                                                              ===================   ==================

</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 6 -

<PAGE>


                           TITANIUM METALS CORPORATION

          CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (CONTINUED)
                                 (In thousands)

<TABLE>

                                                                                   Three months ended March 31,
                                                                              ----------------------------------------
                                                                                     2004                  2003
                                                                              ------------------    ------------------

<S>                                                                           <C>                   <C>
Cash and cash equivalents:
   Net (decrease) increase from:
     Operating, investing and financing activities                            $       (2,280)       $       20,220
     Currency translation                                                                 19                   122
                                                                              ------------------    ------------------
                                                                                      (2,261)               20,342

   Cash and cash equivalents at beginning of period                                   35,040                 6,214
                                                                              ------------------    ------------------

   Cash and cash equivalents at end of period                                 $       32,779        $       26,556
                                                                              ==================    ==================

Supplemental disclosures:
   Cash paid for:
     Interest                                                                 $          366        $          455
     Income taxes, net                                                        $           39        $          677


</TABLE>

           See accompanying Notes to Consolidated Financial Statements
                                      - 7 -

<PAGE>



                           TITANIUM METALS CORPORATION

      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)

                        Three months ended March 31, 2004
                                 (In thousands)
<TABLE>

                                                                                    Accumulated
                                                            Additional                 Other                             Total
                                        Common    Common     Paid-In   Accumulated Comprehensive Treasury  Deferred   Stockholders'
                                        Shares     Stock     Capital     Deficit    Income (Loss) Stock  Compensation    Equity
                                       --------  --------   ---------  -----------  -----------  --------  ---------  -----------

<S>                                      <C>     <C>        <C>        <C>          <C>          <C>       <C>        <C>
Balance at December 31, 2003             3,181   $    32    $350,643   $ (140,428)  $  (50,226)  $(1,208)  $    (56)  $  158,757

Components of comprehensive
   income (loss):

   Net loss                                  -         -           -       (1,654)           -         -          -       (1,654)

   Change in cumulative currency
     translation adjustment                  -         -           -            -        1,616         -          -        1,616

   Unrealized gains on marketable
     securities                              -         -           -            -        4,450         -          -        4,450

   TIMET's share of VALTIMET's
     unrealized net gains on
     derivative financial instruments
     qualifying as cash flow hedges          -         -           -            -          250         -          -          250

Issuance of common stock                     -         -          40            -            -         -          -           40

Stock award cancellations                   (1)        -         (51)           -            -         -         51            -

Amortization of deferred
   compensation, net of effects of
   stock award cancellations                 -         -           -            -            -         -        (31)         (31)
                                       --------  --------   ---------  -----------  -----------  -------   ---------  -----------

Balance at March 31, 2004                3,180   $    32    $350,632   $ (142,082)  $  (43,910)  $(1,208)  $    (36)  $  163,428
                                       ========  ========   =========  ===========  ===========  ========  =========  ===========

</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"), a wholly-owned subsidiary which was deconsolidated at December
31, 2003,  and for which all prior  periods were  retroactively  restated.  Such
retroactive  restatement did not impact net loss,  stockholders'  equity or cash
flow  from   operations  for  any  prior  period.   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 March 31, 2004, and the
Consolidated  Statements of Operations,  Comprehensive Income (Loss), Changes in
Stockholders' Equity and Cash Flows for the interim periods ended March 31, 2004
and 2003,  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
present fairly 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 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,  2003 (the  "2003
Annual Report").

     At  March  31,  2004,   Valhi,   Inc.  and   subsidiaries   ("Valhi")  held
approximately  40.8% of TIMET's  outstanding common stock and approximately 0.4%
of the Capital Trust's  outstanding  6.625% mandatorily  redeemable  convertible
preferred securities,  beneficial unsecured convertible  securities ("BUCS"). At
March 31, 2004, 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 approximately 8% of TIMET's common stock.  TIMET's U.S. pension plans began
investing in the CMRT in the second quarter of 2003; however, these plans invest
only in a portion of the CMRT that does not hold TIMET  common  stock.  At March
31,  2004,   Contran   Corporation   ("Contran")   held,   directly  or  through
subsidiaries,  approximately 90% of Valhi's outstanding common stock, and Harold
C. Simmons' spouse owned 39.8% of the  outstanding  BUCS.  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. Mr. Simmons may be deemed
to control each of Contran, Valhi and TIMET.

                                      - 9 -

<PAGE>


     The Company has elected 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.  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 fixed stock options during the
three months ended March 31, 2004 and 2003. The following table  illustrates the
effect on net loss and loss per share if the  Company had applied the fair value
recognition  provisions of SFAS No. 123 to all options  granted since January 1,
1995:

<TABLE>
                                                                                 Three months ended March 31,
                                                                           -----------------------------------------
                                                                                  2004                  2003
                                                                           -------------------    ------------------
                                                                             (In thousands, except per share data)
<S>                                                                        <C>                    <C>
Net loss, as reported                                                      $         (1,654)      $       (13,590)
Less stock option related stock-based employee
  compensation expense determined under SFAS No. 123                                    (30)                 (110)
                                                                           -------------------    ------------------

Pro forma net loss                                                         $         (1,684)      $       (13,700)
                                                                           ===================    ==================

Basic and diluted loss per share:
  As reported                                                              $          (0.52)      $         (4.29)
                                                                           ===================    ==================

  Pro forma                                                                $          (0.53)      $         (4.33)
                                                                           ===================    ==================
</TABLE>


     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 on such derivative  financial  instruments is included as a
component of other comprehensive income.

     In March  2004,  the  Company's  Board of  Directors  approved,  subject to
stockholder  approval,  a split of its common stock at a ratio of five shares of
post-split  common  stock for each  outstanding  one share of  pre-split  common
stock,  to be  effected in the form of a stock  dividend.  When  completed,  the
Company will retroactively  adjust all earnings per share data for the effect of
the stock split.

                                     - 10 -

<PAGE>


Note 2 - Inventories

<TABLE>
                                                                                March 31,             December 31,
                                                                                   2004                   2003
                                                                            -------------------    -------------------
                                                                                         (In thousands)

<S>                                                                         <C>                    <C>
Raw materials                                                               $          40,285      $        33,198
Work-in-process                                                                        81,477               76,573
Finished products                                                                      60,415               62,687
Supplies                                                                               13,211               12,248
                                                                            -------------------    -------------------
                                                                                      195,388              184,706
Less adjustment of certain inventories to LIFO basis                                   19,412               18,985
                                                                            -------------------    -------------------

                                                                            $         175,976      $       165,721
                                                                            ===================    ===================
</TABLE>

Note 3 - Marketable securities

     During the first quarter of 2004, the Company purchased 1,277,710 shares of
CompX  International,  Inc.  ("CompX")  Class A common stock for an aggregate of
$12.8  million  in  open  market  or  privately  negotiated   transactions  with
unaffiliated  parties,  representing  approximately  8.5% of the total number of
shares of all  classes of CompX  common  stock  outstanding.  Valhi and a wholly
owned subsidiary of Valhi own an additional 68.6% of CompX's  outstanding common
stock.  At March 31, 2004,  the quoted  market price for CompX's  Class A common
stock was $13.37 per share.  The Company's  shares of CompX Class A common stock
are classified as noncurrent available-for-sale marketable securities carried at
fair value on the  Company's  Consolidated  Balance  Sheet as of March 31, 2004,
with all unrealized gains reported as a component of other comprehensive income.


Note 4 - Property and equipment
<TABLE>

                                                                                March 31,             December 31,
                                                                                   2004                   2003
                                                                           ---------------------    ------------------
                                                                                         (In thousands)

<S>                                                                        <C>                      <C>
Land and improvements                                                      $           6,395        $         6,358
Buildings and improvements                                                            42,153                 41,700
Information technology systems                                                        61,050                 59,782
Manufacturing equipment and other                                                    325,677                318,364
Construction in progress                                                               4,402                  6,754
                                                                           ---------------------    ------------------
                                                                                     439,677                432,958
Less accumulated depreciation                                                        203,140                193,776
                                                                           ---------------------    ------------------

                                                                           $         236,537        $       239,182
                                                                           =====================    ==================
</TABLE>

                                     - 11 -

<PAGE>


Note 5 - Other noncurrent assets

<TABLE>
                                                                                 March 31,            December 31,
                                                                                   2004                   2003
                                                                            --------------------    ------------------
                                                                                         (In thousands)

<S>                                                                         <C>                     <C>
Deferred financing costs                                                    $           7,641       $         7,563
Prepaid pension cost                                                                    9,521                 8,981
Notes receivable from officers                                                            119                   145
Other                                                                                       5                     3
                                                                            --------------------    ------------------

                                                                            $          17,286       $        16,692
                                                                            ====================    ==================
</TABLE>


Note 6 - Accrued liabilities
<TABLE>

                                                                                March 31,             December 31,
                                                                                   2004                   2003
                                                                           ---------------------    ------------------
                                                                                         (In thousands)

<S>                                                                        <C>                      <C>
OPEB cost                                                                  $           3,143        $         3,135
Pension cost                                                                           6,713                  8,466
Payroll and vacation                                                                   4,795                  6,891
Incentive compensation                                                                 1,555                    579
Other employee benefits                                                                8,909                  9,731
Deferred income                                                                        1,497                  1,664
Environmental costs                                                                    1,001                    301
Taxes, other than income                                                               4,948                  4,408
Accrued interest on debt payable to the Capital Trust                                 22,754                      -
Wyman-Gordon installment                                                                   -                  2,800
Other                                                                                  7,207                  7,188
                                                                           ---------------------    ------------------

                                                                           $          62,522        $        45,163
                                                                           =====================    ==================
</TABLE>

     During the third  quarter of 2003,  the  Company and  Wyman-Gordon  Company
("Wyman-Gordon")  agreed  to  terminate  the 1998  purchase  and sale  agreement
associated with the formation of the titanium castings joint venture  previously
owned by the two parties. The Company agreed to pay Wyman-Gordon a total of $6.8
million in three quarterly  installments  in connection  with this  termination,
which included the termination of certain favorable  purchase terms. The Company
recorded a one-time  charge for the entire $6.8  million as a reduction to sales
in the third  quarter  of 2003.  The  Company  paid the  first two  installments
aggregating $4.0 million to Wyman-Gordon during 2003 and paid the remaining $2.8
million in the first quarter of 2004.

     Effective January 1, 2004, the Company modified the vacation policy for its
U.S.  salaried  employees.  Such  employees no longer accrue their entire year's
vacation  entitlement  on January 1, but rather will  accrue the current  year's
vacation  entitlement  over the course of the year.  As a result,  the Company's
reduced its  vacation  accrual  for these  employees  from $1.9  million to zero
during the first  quarter of 2004,  resulting in one-time  reductions in cost of
sales of $1.6  million and  selling,  general,  administrative  and  development
expense of $0.3 million.

     See Note 9 with respect to accrued  interest on debt payable to the Capital
Trust.

                                     - 12 -

<PAGE>


Note 7 - Boeing advance

     Under the terms of the amended  long-term  agreement  ("LTA") between TIMET
and The  Boeing  Company  ("Boeing"),  in years  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 March 31, 2004,  approximately  $27.3 million of customer advances related
to the Company's LTA with Boeing.

Note 8 - Bank debt

     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.  The Company took advantage of this  flexibility  during the first
quarter  of  2004,   effectively   reducing  the  Company's   current  borrowing
availability  in the U.S. by $12 million.  However,  the Company can regain this
availability by completing an updated equipment appraisal. As of March 31, 2004,
the Company had no  outstanding  borrowings and had aggregate  unused  borrowing
availability  of  approximately  $134 million under its U.S. and European credit
facilities.

Note 9 - Capital Trust

     In November  1996,  the Capital Trust issued  $201.3  million BUCS and $6.2
million  6.625%  common  securities.  TIMET owns all of the  outstanding  common
securities of the Capital Trust, and the Capital Trust is a wholly-owned finance
subsidiary  of TIMET.  The Capital Trust used the proceeds from such issuance to
purchase from the Company  $207.5  million  principal  amount of TIMET's  6.625%
convertible   junior   subordinated   debentures  due  2026  (the  "Subordinated
Debentures").  Interest on the  Subordinated  Debentures is recorded as interest
expense.  The Subordinated  Debentures and accrued interest  receivable were the
sole assets of the Capital Trust at March 31, 2004.

     In October 2002, the Company  exercised its right to defer future  interest
payments on the Subordinated Debentures,  effective beginning with the Company's
December 1, 2002  scheduled  interest  payment.  Based on the deferral,  accrued
interest on the Subordinated  Debentures was reflected as a long-term  liability
in the  Consolidated  Balance Sheet at December 31, 2003. On March 24, 2004, the
Company's Board of Directors approved resumption of scheduled quarterly interest
payments on the Subordinated  Debentures with the next scheduled payment on June
1, 2004. The Company's  Board also approved  payment of all previously  deferred
interest on the Subordinated Debentures. On April 15, 2004, the Company paid the
deferred interest in the amount of $21.7 million.  Based on the Board's approval
and subsequent  payment,  the Company  reclassified  the accrued interest on the
Subordinated Debentures to current liabilities at March 31, 2004. See also Notes
6 and 16.

                                     - 13 -

<PAGE>


Note 10 - Other income (expense)

<TABLE>
                                                                                   Three months ended March 31,
                                                                             ------------------     ------------------
                                                                                   2004                   2003
                                                                             ------------------     ------------------
                                                                                          (In thousands)

<S>                                                                          <C>                    <C>
Other operating income (expense):
   Litigation settlement                                                     $             -        $           475
   Other, net                                                                             74                    153
                                                                             ------------------     ------------------

                                                                             $            74        $           628
                                                                             ==================     ==================

Other non-operating income (expense):
   Interest income                                                           $           100        $           112
   Equity in earnings of common securities of the
     Capital Trust                                                                       113                    105
   Foreign exchange gains (losses)                                                       472                   (630)
   Other, net                                                                             53                     (2)
                                                                             ------------------     ------------------


                                                                             $           738        $          (415)
                                                                             ==================     ==================
</TABLE>

     During the first quarter of 2003, the Company received $0.5 million related
to its settlement of certain  litigation  relating to power outages  suffered at
its  Henderson,  Nevada  facility  in 1997 and 1998 as a  result  of  contractor
activity.

Note 11 - Income taxes

<TABLE>
                                                                                      Three months ended
                                                                                           March 31,
                                                                          --------------------------------------------
                                                                                  2004                    2003
                                                                          ---------------------    -------------------
                                                                                        (In thousands)

<S>                                                                       <C>                      <C>
Expected income tax benefit, at 35%                                       $            (259)       $          (4,438)
Non-U.S. tax rates                                                                      (51)                     117
U.S. state income taxes, net                                                           (192)                    (482)
Nontaxable income                                                                         -                      (93)
Change in valuation allowance:
  Adjustment of deferred tax valuation allowance                                        985                    5,259
Other, net                                                                               40                       94
                                                                          ---------------------    -------------------

                                                                          $             523        $             457
                                                                          =====================    ===================
</TABLE>

     At March 31, 2004,  the Company had, for U.S.  federal income tax purposes,
(i) net operating loss ("NOL") carryforwards of $119 million that expire in 2020
through 2024,  (ii) a capital loss  carryforward  of $89 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 March 31,  2004,  the  Company  had the
equivalent of (i) a $30 million NOL  carryforward in the United Kingdom and a $2
million NOL carryforward in Germany, both of which have indefinite  carryforward
periods, and (ii) $0.6 million of NOL carryforwards in Italy that expire in 2008
and 2009.

                                     - 14 -

<PAGE>


Note 12 - Employee benefits

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

<TABLE>

                                                                                  Three months ended March 31,
                                                                            ------------------------------------------
                                                                                   2004                   2003
                                                                            -------------------     ------------------
                                                                                         (In thousands)

<S>                                                                         <C>                     <C>
Service cost                                                                $           885         $           715
Interest cost                                                                         3,151                   2,735
Expected return on plan assets                                                       (3,269)                 (2,244)
Amortization of unrecognized prior service cost                                         122                     144
Amortization of net losses                                                            1,093                   1,062
                                                                            -------------------     ------------------

  Net periodic pension expense                                              $         1,982         $         2,412
                                                                            ===================     ==================
</TABLE>

     The  Company  has made $2.1  million of cash  contributions  to its defined
benefit pension plans in 2004 through March 31, 2004 (all of which relate to the
UK  plan),   and  the  Company   currently   expects  to  make  additional  cash
contributions of approximately $7.3 million to its defined benefit pension plans
during 2004 ($1.8  million to the US plan and $5.5 million to the UK plan).  The
current aggregate  estimate for full-year 2004 cash  contributions  represents a
$2.1 million  decrease  from  estimates as of December 31, 2003,  based upon the
effects  on the US plan of the  Company's  application  of the  Pension  Funding
Equity Act of 2004, which was enacted on April 9, 2004.

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

<TABLE>

                                                                                  Three months ended March 31,
                                                                            ------------------------------------------
                                                                                   2004                   2003
                                                                            -------------------     ------------------
                                                                                         (In thousands)

<S>                                                                         <C>                     <C>
Service cost                                                                $           127         $           176
Interest cost                                                                           403                     385
Amortization of unrecognized prior service cost                                        (116)                    (94)
Amortization of net losses                                                              227                     199
                                                                            -------------------     ------------------

  Net periodic OPEB expense                                                 $           641         $           666
                                                                            ===================     ==================

</TABLE>


                                     - 15 -

<PAGE>


     In  December  2003,  the  Medicare   Prescription  Drug,   Improvement  and
Modernization Act of 2003 (the "Medicare Act of 2003") was enacted. The Medicare
Act of 2003 introduced a prescription drug benefit under 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  equivalent  to  Medicare  Part D.  Detailed
regulations  necessary  to  implement  the  Medicare  Act of 2003  have not been
issued,  including  those that would  specify the manner in which plan  sponsors
could  demonstrate  their  eligibility  to receive  the  subsidy.  Additionally,
certain  accounting issues raised by the Medicare Act of 2003,  including how to
account  for the  federal  subsidy,  are not  explicitly  addressed  by  current
existing authoritative  guidance. In accordance with FASB Staff Position FAS No.
106-1,  the  Company  has  elected to defer  accounting  for the  effects of the
Medicare  Act of 2003 until  authoritative  guidance  on how to account  for the
federal  subsidiary  has been issued.  Consequently,  the Company's  accumulated
postretirement benefit obligation and net periodic  postretirement benefit cost,
as reflected  in the  accompanying  Consolidated  Financial  Statements,  do not
reflect any effect of the Medicare Act of 2003. Specific  authoritative guidance
on the accounting for the federal  subsidy is pending,  and that guidance,  when
issued,  could  require  the  Company to change  previously  reported  financial
information, depending on the transition provisions of such guidance.

Note 13 - Commitments and contingencies

     Environmental  matters. As previously  disclosed in the 2003 Annual Report,
TIMET and Basic  Management,  Inc.  ("BMI")  entered  into an  agreement in 1999
providing  that upon payment by BMI of the cost to design,  purchase and install
the technology and equipment  necessary to allow the Company to stop discharging
liquid and solid  effluents  and  co-products  into  settling  ponds  located on
certain lands owned by the Company adjacent to its Henderson,  Nevada plant site
(the "TIMET Pond Property"), the Company would convey the TIMET Pond Property to
BMI, at no additional cost. Under this agreement, BMI will pay 100% of the first
$15.9 million of the cost for this  project,  and TIMET will pay 50% of the cost
in excess of $15.9 million, up to a maximum payment by TIMET of $2 million.  The
Company  presently  expects  that the total cost of this project will not exceed
$15.9  million.  The Company and BMI are continuing  discussions  about possible
modifications to the original project scope and also the 1999 agreement, and are
also  continuing  investigation  with  respect to certain  environmental  issues
associated with the TIMET Pond Property, including possible groundwater issues.

     Under  certain  circumstances  (not  presently  in  effect),  TIMET  may be
required to restore some portion of the TIMET Pond  Property to the condition it
was in prior to  TIMET's  use of the  property,  before  returning  title of the
affected  property to BMI. The Company  currently  believes any liability it may
have  under  this  obligation  to  be  remote.  The  Company  is  continuing  to
investigate  this potential  liability,  and is presently unable to estimate the
magnitude of such potential liability.

     The  Company is also  continuing  assessment  work with  respect to its own
active  plant site in  Henderson,  Nevada.  In 2000  through  2002,  the Company
commissioned  studies of certain  remediation issues at the Company's plant site
and other Company-owned sites within the BMI Complex.  The Company currently has
$3.9 million  accrued based on the  undiscounted  cost estimates of the probable
costs for  remediation of these sites.  The upper end of the range of reasonably
possible  costs to remediate  these sites is  approximately  $8.6  million.  The
Company expects these accrued  expenses to be paid over a period of up to thirty
years.

                                     - 16 -

<PAGE>


     As of March 31, 2004, the Company had accrued an aggregate of approximately
$4.2 million for  environmental  matters,  including those discussed  above. 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.  TIMET is the primary  obligor on two workers'  compensation  bonds,
each having a maximum  obligation of $1.5 million,  issued on behalf of a former
subsidiary,  Freedom Forge Corporation  ("Freedom  Forge"),  which TIMET sold in
1989. Freedom Forge filed for Chapter 11 bankruptcy  protection in July 2001 and
discontinued payment on the underlying workers'  compensation claims in November
2001. During 2002 and 2003, TIMET received notices that the issuers of the bonds
were  required  to make  payments  on the bonds for  applicable  claims and were
requesting   reimbursement  from  TIMET.  Through  March  31,  2004,  TIMET  has
reimbursed the issuers  approximately  $0.9 million for claims under these bonds
and $1.1  million  remains  accrued  for future  payments.  TIMET may revise its
estimated  liability under these bonds in the future as additional  facts become
known or claims develop.

     In March 2001,  certain standard grade material produced by the Company was
found to  contain  tungsten  inclusions  as a result  of  tungsten  contaminated
silicon sold to the Company by a third-party supplier. The Company has paid $1.2
million for claims related to this matter since initial  identification,  and as
of March 31,  2004,  all pending  claims have been  investigated  and  resolved.
However,  there is no assurance that all potential claims have been submitted to
the Company.  The Company has filed suit seeking full  recovery from its silicon
supplier for any liability the Company has incurred or might incur,  although no
assurance  can be given that the Company will  ultimately be able to recover all
or any portion of such  amounts.  The Company has not  recorded  any  recoveries
related to this matter as of March 31, 2004.

     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  in any  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.

                                     - 17 -

<PAGE>


     See the 2003 Annual Report for additional  information  concerning  certain
legal and environmental matters, commitments and contingencies.

Note 14 - Earnings per share

     Basic earnings (loss) per share is based on the weighted  average number of
unrestricted  common shares  outstanding  during each period.  Diluted  earnings
(loss)  per  share  reflects  the  dilutive  effect  of  common  stock  options,
restricted stock and the assumed  conversion of the BUCS. The assumed conversion
of the BUCS was omitted  from the  diluted  loss per share  calculation  for the
three months ended March 31, 2004 and 2003 because the effect was  antidilutive.
Had the BUCS not been antidilutive,  diluted losses would have decreased by $3.8
million and $3.6  million,  respectively,  for the three  months ended March 31,
2004 and 2003.  Diluted  average  shares  outstanding  would have  increased  by
approximately  540,000  shares  for  each of  these  periods  from  the  assumed
conversion of the BUCS.  Stock options and restricted  shares  excluded from the
calculation  because  they were  antidilutive  were  approximately  114,000  and
approximately 133,000,  respectively,  for the three months ended March 31, 2004
and 2003.

Note 15 - Business segment information

     The  Company's  production  facilities  are  located in the United  States,
United  Kingdom,  France and Italy,  and its  products are sold  throughout  the
world. The Company's worldwide  integrated  activities are conducted through its
"Titanium  melted and mill  products"  segment,  currently  the  Company's  only
segment. Sales, gross margin, operating income (loss), 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 March 31,
                                                                               2004                      2003
                                                                       ---------------------     ---------------------
                                                                         ($ in thousands, except selling price data)

<S>                                                                    <C>                       <C>
Titanium melted and mill products:
   Melted product net sales                                            $           17,395        $          12,854
   Mill product net sales                                                          90,675                   73,617
   Other product sales                                                             12,418                   12,823
                                                                       ---------------------     ---------------------
                                                                       $          120,488        $          99,294
                                                                       =====================     =====================
Melted product shipments:
   Volume (metric tons)                                                             1,420                      985
   Average selling price ($ per kilogram)                              $            12.25        $           13.05

Mill product shipments:
   Volume (metric tons)                                                             2,925                    2,315
   Average selling price ($ per kilogram)                              $            31.00        $           31.80

</TABLE>

                                     - 18 -

<PAGE>


Note 16 - Subsequent event

     The Company's Board of Directors has approved an exchange offer pursuant to
which  the  Company  would  offer  to  exchange  any and all of the  outstanding
4,024,820  BUCS issued by the Capital  Trust for shares of a newly created 6.75%
Series A Convertible  Preferred Stock to be issued by the Company (the "Series A
Preferred  Stock") at the exchange rate of one share of Series A Preferred Stock
for each BUCS. Each share of Series A Preferred  Stock would be convertible,  in
whole or in part,  at any time,  at the option of the holder  thereof,  into 0.2
shares of TIMET  common  stock (or at a rate of one share of TIMET  common stock
per  one  share  of  Series  A  Preferred  Stock,  assuming  completion  of  the
five-for-one  stock split discussed in Note 1), subject to adjustment in certain
events.

     The holders of shares of the Series A  Preferred  Stock will be entitled to
receive  cumulative  cash  dividends  at the rate of  6.75%  of the  liquidation
preference per annum per share (equivalent to $3.375 per annum per share), when,
as and if declared by the  Company's  Board of  Directors  out of funds of TIMET
legally  available  for the payment of dividends.  The Series A Preferred  Stock
would not be mandatorily redeemable, but it would be redeemable at the option of
the Company under certain circumstances.

     The exchange offer is subject to the  satisfaction  of several  conditions,
including approval by the Company's stockholders of the exchange offer and of an
amendment to the Company's  certificate of  incorporation to increase the number
of  shares  that  TIMET is  authorized  to  issue.  The  exchange  offer is also
conditioned on the  declaration  and continued  effectiveness  of a registration
statement and prospectus on Form S-4.

                                     - 19 -

<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 months
ended  March 31,  2004 and 2003.  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 2004.

<TABLE>

                                                                                 Three months ended March 31,
                                                                            ---------------------------------------
                                                                                  2004                 2003
                                                                            ------------------   ------------------
                                                                                       ($ in thousands)

<S>                                                                         <C>                  <C>
Net sales                                                                   $       120,488      $        99,294
Gross margin                                                                $        12,356      $         1,018
Operating income (loss)                                                     $         2,830      $        (8,064)

Gross margin percent of net sales                                                        10%                   1%

Percentage change in:
   Sales volume:
     Melted product sales volume                                                        +44                  +53
     Mill product sales volume                                                          +26                  -14

   Average selling prices - includes changes in product mix:
     Melted products                                                                     -6                  -16
     Mill products                                                                       -3                   +7

   Selling prices - excludes changes in product mix:
     Melted products                                                                     -4                  -12
     Mill products in U.S. dollars                                                       +2                   -1
     Mill products in billing currencies (1)                                             -3                   -6

-------------------------------------------------------------------------------------------------------------------
<FN>
(1) Excludes the effect of changes in foreign currencies.
</FN>
</TABLE>


     First  quarter of 2004  compared to first  quarter of 2003.  The  Company's
melted  product sales  increased 35% from $12.9 million during the first quarter
of 2003 to $17.4 million during the first quarter of 2004 primarily due to a 44%
increase in melted  product sales volume,  partially  offset by a 6% decrease in
melted product average selling prices. Melted products consist of ingot and slab
and are  generally  sold  only in U.S.  dollars.  Melted  product  sales  volume
increased principally as a result of new customer relationships and share gains.
Excluding the effects of changes in product mix,  melted product  selling prices
during the first  quarter of 2004  decreased 4% compared to the first quarter of
2003.

                                     - 20 -

<PAGE>


     The Company's  mill product sales  increased 23% from $73.6 million  during
the first  quarter of 2003 to $90.7  million  during the first  quarter of 2004.
This  increase  was  principally  due to a 26%  increase in mill  product  sales
volume,  partially  offset by a 3%  decrease  in mill  product  average  selling
prices.  As compared to the first quarter of 2003,  mill product average selling
prices were positively  affected by the weakening of the U.S. dollar compared to
the British pound  sterling and the euro and  negatively  affected by changes in
product mix.

     Gross margin (net sales less cost of sales) was 10% of net sales during the
first  quarter  of  2004,  compared  to  1%  during  the  year-ago  period.  The
improvement in gross margin was primarily a result of improved  plant  operating
rates  (from 52% in the first  quarter  of 2003 to 72% in the first  quarter  of
2004) and the Company's continued cost management  efforts.  Gross margin during
the  first  quarter  of 2004  was also  positively  affected  by a $1.6  million
reduction in cost of sales related to the Company's  elimination of its vacation
accrual for U.S.  salaried  employees.  On January 1, 2004, the Company modified
its vacation policy for its U.S. salaried  employees,  whereby such employees no
longer accrue their entire year's vacation  entitlement on January 1, but rather
will accrue the current year's vacation entitlement over the course of the year.
Additionally,  gross margin was positively  affected by the  elimination of $1.0
million of previously  recorded  rebate accruals that are no longer required and
negatively  affected by a $0.8 million  accrual for  potential  employee  profit
sharing payments.

     Selling,  general,  administrative and development expenses decreased by 2%
from $9.9 million  during the first  quarter of 2003 to $9.7 million  during the
first  quarter  of 2004,  principally  as a result of a $0.3  million  reduction
related to the Company's  elimination of its vacation accrual for U.S.  salaried
employees.

     Equity in (losses)  earnings of joint  ventures  decreased from earnings of
$0.2 million  during the first quarter of 2003 to a loss of $0.1 million  during
the first  quarter  of 2004,  principally  due to a  decrease  in the  operating
results of VALTIMET, the Company's minority-owned welded tube joint venture.

     Net other income  (expense)  decreased  from $0.6 million  during the first
quarter of 2003 to $0.1 million  during the first  quarter of 2004,  principally
due to a gain of $0.5 million  related to the  settlement of certain  litigation
during the first quarter of 2003.

     Non-operating income (expense).

<TABLE>

                                                                              Three months ended March 31,
                                                                               2004                   2003
                                                                        --------------------   -------------------
                                                                                     (In thousands)

<S>                                                                     <C>                    <C>
Interest expense on debt payable to the Capital Trust                   $        (3,751)       $        (3,512)
Other interest expense                                                             (558)                  (688)
                                                                        --------------------   -------------------

                                                                        $        (4,309)       $        (4,200)
                                                                        ====================   ===================

Interest income                                                         $           100        $           112
Equity in earnings of common securities of the
   Capital Trust                                                                    113                    105
Foreign exchange gains (losses)                                                     472                   (630)
Other, net                                                                           53                     (2)
                                                                        --------------------   -------------------

                                                                        $           738        $          (415)
                                                                        ====================   ===================

</TABLE>

                                     - 21 -

<PAGE>

     Quarterly interest expense on the Company's Subordinated Debentures payable
to the  Capital  Trust  approximates  $3.4  million,  exclusive  of any  accrued
interest on deferred interest  payments.  In October 2002, the Company exercised
its right to defer  future  interest  payments on this debt  effective  with the
Company's  December 1, 2002 scheduled  interest payment.  Interest  continues to
accrue at the 6.625% coupon rate on the principal and unpaid interest.  On March
24, 2004,  the  Company's  Board of Directors  approved  resumption of scheduled
quarterly  interest  payments  on the  Subordinated  Debentures  with  the  next
scheduled  payment on June 1, 2004. The Company's Board also approved payment of
all previously  deferred interest on the Subordinated  Debentures.  On April 15,
2004,  the Company  paid the deferred  interest in the amount of $21.7  million,
$21.0 million of which related to the BUCS.

     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
three months ended March 31, 2004 and 2003, the Company's income tax rate varied
from the U.S.  statutory  rate  primarily due to an increase in the deferred tax
valuation  allowance  related to the Company's tax attributes  that did not meet
the  "more-likely-than-not"  recognition criteria during those periods. See Note
11 to the Consolidated  Financial Statements.  The Company's current tax expense
during the three months  ended March 31, 2004 and 2003 relates  primarily to its
operations in France and Italy.

     European  operations.  The Company has  substantial  operations  and assets
located in Europe, principally the United Kingdom, France and Italy. Titanium is
sold  worldwide,  and many similar  factors  influence  the  Company's  U.S. and
European  operations.  Approximately  42% of the Company's  sales  originated in
Europe for the three  months ended March 31, 2004,  of which  approximately  62%
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.  Net  currency  transaction  gains/losses  included in the  Company's
results of operations  were a gain of $0.5 million during the three months ended
March 31, 2004 and a loss of $0.6  million  during the three  months ended March
31, 2003. At March 31, 2004,  consolidated assets and liabilities denominated in
currencies other than functional currencies were approximately $31.5 million and
$41.2 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.

                                     - 22 -

<PAGE>


     Outlook.  The  "Outlook"  section  contains  a  number  of  forward-looking
statements,  all of which are based 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, unless
otherwise noted.  Additionally,  unless  otherwise noted, the "Outlook"  section
excludes any potential effects from the BUCS exchange offer discussed further in
the  "Liquidity  and  Capital  Resources  - Other"  section of this MD&A.  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.

     The Company currently expects sales revenue for the full year 2004 to range
from $460  million to $480  million.  This range  reflects  an  increase  of $35
million from our previous guidance,  primarily related to significant  increases
in sales volume and somewhat higher average selling prices. Melted product sales
volume for the full year 2004 is  expected to  approximate  4,950  metric  tons,
reflecting a 5% increase over 2003 levels, and mill product sales volume for the
full year 2004 is expected to approximate  11,350 metric tons,  reflecting a 28%
increase  compared to 2003  levels.  These  increases  reflect  expected  volume
improvements in all key markets - commercial and military aerospace,  industrial
and emerging.

     The Company currently expects production volume to remain relatively stable
throughout the remainder of 2004,  resulting in overall  full-year 2004 capacity
utilization of  approximately  70% to 75%.  Capacity  utilization was 72% in the
first  quarter  of  2004.   The  Company's   backlog  of  unfilled   orders  was
approximately  $220 million at March 31, 2004,  up from $180 million at December
31, 2003 and $165  million at March 31,  2003.  Substantially  all the March 31,
2004 backlog is scheduled to ship within the next 12 months. The Company's order
backlog may not be a reliable indicator of future business activity.

     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 costs and energy costs.  Raw material costs  represent the largest
portion of the Company's  manufacturing  cost structure.  The Company expects to
manufacture about one-third of its titanium sponge requirements during 2004. The
unit cost of titanium sponge manufactured at TIMET's Henderson,  Nevada facility
is expected to decrease  relative to 2003,  due primarily to higher sponge plant
operating  rates as the plant  reaches full  capacity.  The Company  expects the
aggregate  cost of purchased  sponge to increase  through the remainder of 2004.
The Company is  experiencing  higher  prices for certain  types of scrap and for
energy,  and the Company expects those costs to continue to increase  throughout
2004. The Company  recently  announced an increase in prices on all non-contract
titanium  melted and mill  products  in an effort to offset the  effects of such
increased raw material and energy costs.

     Based on anticipated  sales volumes,  production levels and continued focus
on cost management  opportunities,  somewhat offset by the anticipated continued
increases in scrap and energy  costs,  the Company  expects full year 2004 gross
margin to range from 8% to 10% of net sales.

                                     - 23 -

<PAGE>


     Selling,  general,  administrative and development expenses for 2004 should
approximate  $42  million,  an increase of $6 million from 2003.  This  increase
relates  primarily to (i) potential  employee  profit sharing payouts based upon
the Company's  currently projected full year return on equity, (ii) increases in
costs related to the Company's  intercompany services agreement with Contran and
(iii) additional  auditing and consulting costs expected to be incurred relative
to the Company's  compliance  with the  Sarbanes-Oxley  Act's  internal  control
requirements.

     The Company  currently  anticipates that it will receive orders from Boeing
for about 1.5 million  pounds of product  during 2004. At this  projected  order
level,  the  Company  expects to  recognize  about $23 million of income in 2004
under the Boeing LTA's take-or-pay provisions.

     The  current  outlook is for 2004  operating  income to range  between  $16
million and $26 million,  which is a $2 million increase from previous guidance.
Excluding the Boeing take-or-pay income, the Company currently expects operating
results in 2004 to range  between  operating  loss of $7 million  and  operating
income of $3 million.

     Interest expense should approximate $16 million in 2004, including interest
on the Company's Subordinated Debentures held by the Capital Trust.

     The Company  currently  expects 2004 full year net income to range  between
breakeven  and  $10  million,  which  is a $3  million  increase  from  previous
guidance. Excluding the Boeing take-or-pay income, the Company currently expects
a net loss in 2004 of between $13 million and $23 million.

     The  Company  expects to use $1  million to $11  million in cash flows from
operating  activities  during 2004,  reflecting  in part the 2004  resumption of
interest  payments on the  Subordinated  Debentures  (including  the $19 million
accrued  interest at December 31, 2003).  Capital  expenditures  during 2004 are
expected to  approximate  $18  million.  Depreciation  and  amortization  should
approximate  $32 million in 2004.  The Company  currently  expects its full-year
2004 cash  contributions to its defined benefit pension plans to be $9.4 million
and expects its pension expense to approximate $8 million in 2004.

     Upon  completion  of the BUCS  exchange  offer,  the  Company's  results of
operations  and cash flows from  operating  and  financing  activities  would be
affected.  If 100% of the BUCS were exchanged,  the Company's  interest  expense
would be reduced by $3.3 million per quarter.  However, net income available for
common  stockholders  would reflect the impact of preferred  stock  dividends of
$3.4 million per quarter.  Additionally,  the Company would  recognize  either a
non-operating  gain  or  loss on the  exchange,  which  would  result  from  the
difference,  if any, between the carrying value of the  Subordinated  Debentures
eliminated  from the  Consolidated  Balance  Sheet  and the  shares  of Series A
Preferred  Stock issued in the exchange (which will be recorded at fair value on
the date the  exchange  is  completed),  reduced  by the  carrying  value of any
unamortized deferred financing costs related to the BUCS that will be written of
upon exchange. If 100% of the BUCS had been exchanged as of March 31, 2004, such
gain would have been $29.4 million,  reflecting the $201.2 million book value of
related Subordinated Debentures, less the $165.1 million estimated fair value of
Series A Preferred Stock (at $46.50 per share,  based on the last reported trade
of the BUCS on March 31, 2004 according to NASDAQ's website,  less $22.1 million
attributable  to accrued and unpaid  dividends)  and the $6.7  million  carrying
value of unamortized deferred financing costs.

                                     - 24 -

<PAGE>


     Non-GAAP  financial  measures.  In an  effort  to  provide  investors  with
information  in addition to the  Company's  results as  determined by accounting
principles  generally  accepted in the United  States of America  ("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;

     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; and

     o    The  Company  discloses  forecasted  operating  income  and net income
          excluding  the impact of the Boeing  take-or-pay  income.  The Company
          believes this provides  investors  with useful  information  to better
          analyze the Company's  business and possible  future  earnings  during
          periods  after  December 31,  2007,  at which time the Company will no
          longer receive the positive effects of the take-or-pay income.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  consolidated cash flows for the three months ended March 31,
2004 and 2003 are presented  below. The following  discussion  should be read in
conjunction  with the  Company's  Consolidated  Financial  Statements  and Notes
thereto.

<TABLE>

                                                                               Three months ended March 31,
                                                                        --------------------------------------------
                                                                               2004                    2003
                                                                        --------------------    --------------------
                                                                                      (In thousands)
<S>                                                                     <C>                     <C>
Cash (used) provided by:
   Operating activities                                                 $          14,177       $         26,823
   Investing activities                                                           (16,054)                (1,487)
   Financing activities                                                              (403)                (5,116)
                                                                        --------------------    --------------------

   Net cash (used) provided by operating,
     investing and financing activities                                 $          (2,280)      $         20,220
                                                                        ====================    ====================
</TABLE>

                                     - 25 -

<PAGE>


     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 (loss) 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 loss  decreased from $13.6 million for the three months ended March 31,
2003, to $1.7 million for the three months ended March 31, 2004.

     Accounts  receivable  increased  during  the  first  three  months  of 2004
primarily as a result of increased sales.  Accounts receivable  increased during
the first three months of 2003  primarily as a result of increased  sales and an
increase in days sales outstanding as certain  customers  extended their payment
terms with the Company.

     Inventories  increased during the first three months of 2004 as a result of
increased run rates and related inventory build in order to meet the anticipated
sales  volume  increases  during 2004,  as well as the effects of increased  raw
material costs. Inventories decreased during the first three months of 2003 as a
result of reduced run rates at the  Company's  sponge plant,  improved  turnover
within the Company's inventory consignment programs and reduced cycle times.

     Changes in accounts payable and accrued  liabilities  reflect,  among other
things,  the timing of payments to suppliers of titanium sponge,  titanium scrap
and other raw material purchases. Additionally, accrued liabilities decreased in
the first three  months of 2004 due to (i) the $2.8  million  final  installment
related  to  termination  of the prior  Wyman-Gordon  agreement  and (ii) a $2.1
million reclassification of the Company's defined benefit pension liability from
current to  noncurrent,  as the  current  cash  contribution  requirements  were
reduced significantly based on the Pension Funding Equity Act of 2004.

     The increase in customer advances during the first three months of 2004 and
2003  primarily  reflects the  Company's  receipt of the $27.9 million and $27.7
million advances from Boeing in January 2004 and 2003,  respectively,  partially
offset by the application of customer purchases.  Under the terms of the amended
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.

                                     - 26 -

<PAGE>


     In October 2002, the Company  exercised its right to defer future  interest
payments on its  Subordinated  Debentures  held by the Capital Trust,  effective
beginning  with the  Company's  December  1, 2002  scheduled  interest  payment,
although  interest  continued to accrue at the coupon rate on the  principal and
unpaid  interest.  Changes in accrued  interest  payable  to the  Capital  Trust
reflect this activity.

     On March 24, 2004, the Company's Board of Directors approved  resumption of
scheduled  quarterly  interest payments on the Subordinated  Debentures with the
next  scheduled  payment  on June 1, 2004.  The  Company's  Board also  approved
payment of all previously deferred interest on the Subordinated  Debentures.  On
April 15, 2004, the Company paid all previously deferred and accrued interest to
holders of record as of April 5, 2004,  in the  amount of $21.7  million  ($21.0
million  of which  related  to the  BUCS),  which  will  negatively  impact  the
Company's  cash flows for the three and six  months  ended  June 30,  2004.  See
further discussion in Note 9 to the Consolidated Financial Statements

     Investing activities.  The Company's capital expenditures were $3.3 million
for the three months ended March 31, 2004, compared to $1.5 million for the same
period in 2003,  principally  for  replacement  of machinery  and  equipment and
capacity  maintenance.  During the first quarter of 2004, the Company  purchased
1,277,710  shares of CompX Class A common stock for $12.8  million.  See further
discussion in Note 3 to the Consolidated Financial Statements.

     Financing activities.  The Company had zero net borrowings during the three
months ended March 31,  2004.  Cash used during the three months ended March 31,
2003 was due  primarily to the Company's  $4.7 million of net  repayments on its
outstanding  borrowings  upon the Company's  receipt of the $27.7 million Boeing
advance in January 2003.

     Borrowing  arrangements.  Under the terms of the Company's U.S. asset-based
revolving  credit  agreement,  which matures in February  2006,  borrowings  are
limited to the lesser of $105  million or a  formula-determined  borrowing  base
derived  from  the  value  of  accounts  receivable,   inventory  and  equipment
("borrowing  availability").  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. The Company took advantage of this flexibility
during the first quarter of 2004,  effectively  reducing the  Company's  current
borrowing  availability  in the U.S. by $12  million.  However,  the Company can
regain this availability by completing an updated equipment appraisal.  Interest
generally  accrues  at rates  that vary from  LIBOR  plus 2% to LIBOR plus 2.5%.
Borrowings are collateralized by substantially all of the Company's U.S. assets.
The credit  agreement  prohibits the payment of  distributions in respect of the
Capital  Trust's  BUCS if "excess  availability,"  as defined,  is less than $25
million, limits additional  indebtedness,  prohibits the payment of dividends on
the  Company's  common  stock if excess  availability  is less than $40 million,
requires   compliance  with  certain  financial  covenants  and  contains  other
covenants  customary in lending  transactions  of this type.  The Company was in
compliance  in all material  respects  with all  covenants  for the three months
ended  March 31,  2004 and for all periods  during the year ended  December  31,
2003. At March 31, 2004, the Company had no outstanding  borrowings,  and excess
availability (defined as borrowing  availability less outstanding borrowings and
certain contractual commitments such as letters of credit) was approximately $74
million, under the U.S. credit agreement.

                                     - 27 -

<PAGE>


     The Company's  subsidiary,  TIMET UK, has a credit  agreement that provides
for   borrowings   limited   to  the   lesser  of   (pound)22.5   million  or  a
formula-determined borrowing base derived from the value of accounts receivable,
inventory and  property,  plant and equipment  ("borrowing  availability").  The
credit  agreement  includes a revolving  and term loan facility and an overdraft
facility (the "U.K.  Facilities") and matures in December 2005. Borrowings under
the U.K.  Facilities  can be in  various  currencies,  including  U.S.  dollars,
British pounds sterling and euros. Borrowings accrue interest at rates that vary
from LIBOR plus 1% to LIBOR plus 1.25% and are  collateralized  by substantially
all of TIMET UK's assets. The U.K. Facilities require the maintenance of certain
financial   ratios  and  amounts  and  other  covenants   customary  in  lending
transactions of this type.  TIMET UK was in compliance in all material  respects
with all covenants for the three months ended March 31, 2004 and for all periods
during the year ended  December 31, 2003. At March 31, 2004,  the Company had no
outstanding borrowings,  and unused borrowing availability was approximately $42
million, under the U.K. Facilities.

     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.  At March  31,  2004,  the  Company  had no
outstanding  borrowing,  and unused borrowing availability was approximately $18
million, under these facilities.

     Legal and environmental  matters. See Note 13 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 BUCS, 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.

     Corporations  that may be deemed to be  controlled  by or  affiliated  with
Harold C. 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  Corporation,  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.

                                     - 28 -

<PAGE>


     In March  2004,  the  Company's  Board of  Directors  approved,  subject to
stockholder  approval,  a split of its common stock at a ratio of five shares of
post-split  common  stock for each  outstanding  one share of  pre-split  common
stock,  to be effected by a stock  dividend.  When  completed,  the Company will
retroactively  adjust  all  earnings  per share data for the effect of the stock
split.

     The  Company's  Board of Directors  has  approved,  subject to  stockholder
approval,  an  exchange  offer  pursuant  to which the  Company  would  offer to
exchange  any and all of the  outstanding  4,024,820  BUCS issued by the Capital
Trust for shares of Series A Preferred  Stock at the exchange  rate of one share
of Series A  Preferred  Stock for each BUCS.  Each  share of Series A  Preferred
Stock would be  convertible,  in whole or in part, at any time, at the option of
the holder  thereof,  into 0.2 share of TIMET  common stock (or at a rate of one
share of TIMET common stock per one share of Series A Preferred Stock,  assuming
completion of the  five-for-one  stock split),  subject to adjustment in certain
events.

     The holders of shares of the Series A  Preferred  Stock will be entitled to
receive,  when,  as and if declared by the  Company's  Board of Directors out of
funds of TIMET legally  available for the payment of dividends,  cumulative cash
dividends at the rate of 6.75% of the liquidation preference per annum per share
(equivalent to $3.375 per annum per share).  The Series A Preferred  Stock would
not be mandatorily  redeemable,  but it would be redeemable at the option of the
Company  under  certain  circumstances.  See further  discussion of the exchange
offer in Note 16 to the Consolidated Financial Statements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     For a complete  discussion of the Company's market risks, refer to the Item
7A,  "Quantitative  and Qualitative  Disclosures About Market Risk," in the 2003
Annual  Report.  During the three  months  ended  March 31,  2004,  the  Company
purchased certain publicly-traded  marketable equity securities that are exposed
to market risk due to changes in prices of the securities as reported on the New
York Stock Exchange.  The fair value of these  marketable  equity  securities at
March 31, 2004 was $17.1 million,  as compared to a cost basis of $12.8 million.
The  potential  change in the fair  value of these  securities,  assuming  a 10%
change in prices,  would be $1.7 million at March 31,  2004.  See also Note 3 to
the Consolidated Financial Statements.

Item 4. 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 of the Company 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   regarding  required
disclosure.  Both J. Landis Martin, the Company's 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 March 31, 2004. 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.

                                     - 29 -
<PAGE>


     The Company also  maintains a system of internal  controls  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.

     There has been no change to the Company's  system of internal  control over
financial  reporting during the quarter ended March 31, 2004 that has materially
affected,  or is reasonably likely to materially affect, the Company's system of
internal controls over financial reporting.

                                     - 30 -

<PAGE>


PART II. - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

     Reference  is made to Note  13 of the  Consolidated  Financial  Statements,
which information is incorporated herein by reference, and to the Company's 2003
Annual Report for descriptions of certain previously reported legal proceedings.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits:

          10.1 Amendment  No.  3 to Loan and  Security  Agreement  by and  among
               Congress Financial Corporation (Southwest) as Lender and Titanium
               Metals  Corporation  and Titanium  Hearth  Technologies,  Inc. as
               borrowers, dated March 18, 2004, and effective February 12, 2004,
               incorporated  by reference to Exhibit 6 to Amendment No. 4 to the
               statement on Schedule 13D for CompX International,  Inc. filed by
               Valhi,  Inc.  (along with other  reporting  persons) on March 23,
               2004 (File No. 005-54653)

          10.2*2004 Senior Executive Cash Incentive Plan,  effective  January 1,
               2004

          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

          *    Management contract, compensatory plan or arrangement

          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.

     (b)  Reports  on Form 8-K filed by the  registrant  for the  quarter  ended
          March 31, 2004 and through May 3, 2004:

                 Date of Report                  Items Reported
              -------------------               ----------------

               January 28, 2004                     7 and 12
               January 29, 2004                     7 and 9
               February 26, 2004                    5 and 7
               March 25, 2004                       5 and 7
               May 3, 2004                          7 and 12

                                     - 31 -

<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: May 4, 2004     By  /s/ J. Landis Martin
                          ------------------------------------------------------
                          J. Landis Martin
                          Chairman of the Board, President and
                            Chief Executive Officer


Date: May 4, 2004     By  /s/ Bruce P. Inglis
                          ------------------------------------------------------
                          Bruce P. Inglis
                          Vice President - Finance and Corporate
                            Controller

                                     - 32 -